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发表于 2011-9-17 13:16
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Current situation
7 R! P+ B: a7 D+ F& a* B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* Z' T9 n% g. e* D" Q+ Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" J0 V% v$ y8 o. R
impose liquidation values.0 [. K& Z J8 [
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
y( \ ]/ N! D% S3 ?: pAugust, we said a credit shutdown was unlikely – we continue to hold that view.
3 k: Z4 W8 |) g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 \7 \+ p, Q6 n5 h" V
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
. n1 i9 _ N* P% ?/ B$ ^; S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- i" @1 v0 T; H1 d3 w3 oSeptember. Non-financial investment grade is the new safe haven.
5 ]5 H9 K: R% B7 a6 Z! \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
# h3 P3 ?, K' M. g4 hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! l% o$ _/ o0 c; g! [2 |2 Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* [7 y) ^; }" ?6 G; \ }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% _- t, t+ }, n+ X% O. T- OCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% R/ n7 w: {/ N! b+ a$ K
positive for the year-do-date, including high yield.
0 ]$ r2 K u) M4 z, B9 ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! |$ {/ N; P# k j r
finding financing.; D# n$ f# j( i2 O, y9 z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- r* U8 |1 ~+ B6 e w; t
were subsequently repriced and placed. In the fall, there will be more deals.
- u* j3 ?( n9 P2 f0 Y: r; { Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( I+ S! {2 j+ G* f; i" v, s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! K/ B" `* R1 `0 n+ I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 U4 k& z y, Q# Hbankruptcy, they already have debt financing in place./ A: X9 j& q, M. O* \+ o, S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' Q5 ]( D0 T* \, I& ]" c
today.+ H7 t9 t5 N7 @: c. E8 F$ f- z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 J5 y7 a; g% |% U7 v! Femerging markets have no problem with funding. |
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