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发表于 2011-9-17 13:16
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Current situation
: t0 ] M3 z4 } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( t+ R/ P$ q) r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 W9 y+ }9 a1 p8 e, @7 e8 i
impose liquidation values./ V X% }' n1 {7 S; G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 q( ^. y8 s" \9 z' f+ T3 k
August, we said a credit shutdown was unlikely – we continue to hold that view.$ ^7 z9 @4 q4 u9 N1 ^# Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# F4 D! P; R/ `; B ~3 y; `. w2 mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) M( U& j1 ?, _' {, u* V: U
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A look at credit markets% J k3 ^# n; \+ D: N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 P+ K& |) S. n3 W5 f$ B+ s/ w: w
September. Non-financial investment grade is the new safe haven.
8 h [! e% X* `0 i7 W* v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- g+ l. _8 E+ Y0 `9 \) Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ j4 ^4 R* ] q7 M9 @! E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 s5 m% e, j; b6 J- e# s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 m* |2 x- V) ?9 w& k) A$ B+ }
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ [2 V3 g2 q: S8 q' o6 [positive for the year-do-date, including high yield.
1 ]# O0 H6 n4 @" }- ^0 \. _$ y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: v' i$ ~8 ?! ~2 h2 s. ^finding financing.
2 }: b" C4 e* B: u* X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) Q3 v3 |' X3 C% u8 x; Y8 E
were subsequently repriced and placed. In the fall, there will be more deals.- x" {6 E+ D- e4 k3 W
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 G1 h% m3 d1 x$ M3 G
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, u1 t5 M \' N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& x) O) U v0 j2 i+ }
bankruptcy, they already have debt financing in place.
7 x* m" t) g _; V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- Q/ N0 ]1 P1 D8 _. ?3 Yemerging markets have no problem with funding. |
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