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发表于 2011-9-17 13:16
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Current situation5 |0 r% I( H, u# e$ k4 u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 J8 y+ _- U' O* z) ~; E8 Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, y n+ T5 Y+ n9 Q
impose liquidation values.% l- F8 u7 H8 T. O' ^+ J% F2 Q! L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 K% v0 s5 N9 F& M
August, we said a credit shutdown was unlikely – we continue to hold that view.
- U( d0 r6 X7 v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& X' ?) F9 w6 X: \9 L; _8 v4 |scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# P8 e$ L& m& Q
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A look at credit markets
" o0 B% ~0 |- b6 s+ R* I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# W3 O! P, @; ]' s3 M+ B4 _
September. Non-financial investment grade is the new safe haven.
6 Z7 P8 [" F3 M" N0 n' h- { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( @$ ^$ s7 i* xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 X, H/ @5 g/ F$ [- ]8 Q" F$ s" lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 r6 T3 J& L, J3 jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% L; G5 e9 a3 C ?) \1 }$ m1 \ hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 g7 Y! N4 T6 A/ m0 V7 Kpositive for the year-do-date, including high yield.6 V, @/ r9 F9 o( k9 F
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ v" L% P- h2 U+ g0 X' M3 Qfinding financing.6 [: X' c# H" R* }( d# |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- I7 o1 ]0 q9 N2 Nwere subsequently repriced and placed. In the fall, there will be more deals.! w" x# Y* }0 g# H% k' j% |5 Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 x! e8 N& U4 R, H& I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; P% Y9 l; x0 O0 ?' V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% R6 {- g( K- d9 w Q f
bankruptcy, they already have debt financing in place.) |% `$ Q3 z5 `$ _3 \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 o7 k5 e# t3 w8 Atoday.
, V/ x7 A8 P* B% J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ Z$ w) _3 U- w Z* z' P8 jemerging markets have no problem with funding. |
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