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发表于 2011-9-17 13:16
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Current situation
' T# R# e* U2 D. P+ E6 @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 {( |% k* |4 sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 R9 e z' v% R1 Limpose liquidation values.2 R0 l2 z; G) Z; M
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, t1 `, p, Q3 F. Q1 ?8 H
August, we said a credit shutdown was unlikely – we continue to hold that view.2 l7 y# d6 s% a8 g
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( C% v' L; ]. D0 {6 Y$ M$ f( E+ f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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X( l* y- a, w% LA look at credit markets- A0 ?8 H! ~3 L; |$ a
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; t/ f! Y/ C5 p" j& @2 M1 Z; uSeptember. Non-financial investment grade is the new safe haven./ W+ z( e- ?; q" A8 }- A
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' S! T: \6 {) w" C2 b( m
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 j# y" L1 [1 V% ~2 ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 _: t9 Q) y1 D0 B: ?7 L9 f9 m6 b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- E. O5 \$ f& a
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 T, \4 v: M' P) F/ ^( H
positive for the year-do-date, including high yield.
) ^, E' Y6 I6 q; ?2 a. u Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 O% G6 M: D w. t8 x/ a' Bfinding financing.
! @' y: L6 v6 N2 n$ K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; o" L' L& j( X0 l
were subsequently repriced and placed. In the fall, there will be more deals.( T, c& f! g3 M# e: n/ U3 B* j+ g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* Q" X- M- t& |; m! `3 J: ]2 wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ S. u- Z5 D- U( \9 Z$ p l; p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" [3 Y3 q# V2 r" obankruptcy, they already have debt financing in place.- V' K# }1 t7 U/ `4 }( d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 n$ l9 R+ ?6 ]3 J9 s: V9 n: }
today.
0 P; D$ D2 a; a! Z6 [ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 t. r, V, d1 z" n1 ?emerging markets have no problem with funding. |
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