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发表于 2011-9-17 13:16
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Current situation r/ h; q- Q9 F. [! }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: b) Q0 C2 v/ X" oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% p3 J: s! q Z
impose liquidation values.
- P; h# |2 T& g" } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! `' }* X; \3 B- q* [3 W
August, we said a credit shutdown was unlikely – we continue to hold that view.
2 @+ c1 {# s: S, G5 x x The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ }) ]& d8 j( x! r B2 rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
* ^# [9 Q9 E7 W' d1 N! x6 T# r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 L" ~1 e' I! q4 z4 o4 L& ]' J
September. Non-financial investment grade is the new safe haven.
3 ~" l/ J; |+ y1 N High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 W- _/ ?/ E5 x/ Z$ Kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" w: O3 ?) u3 N% M/ q1 g N" E8 Ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 O: O7 F: a' [7 z7 aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 c; \: @; w' }! V7 n6 KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ U6 \* x$ @& x; A! o8 O' C0 q* j
positive for the year-do-date, including high yield.
4 J( ^3 m- {5 r7 d, S m Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( X. Y4 N3 r; g3 g
finding financing.8 Y" r+ j/ k+ r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% ~9 F5 c, o7 D3 \were subsequently repriced and placed. In the fall, there will be more deals.
+ l; z0 G3 \7 K, t O d Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; [) V( ^ v6 t/ m
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 w3 O3 q; k- d3 ]" k/ s/ sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 r. v2 ?9 C8 |' ?" B# |+ k& _bankruptcy, they already have debt financing in place.! b# e, I; l N3 V4 s) e/ t/ k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 |) @% ]9 Y8 stoday.) S; x1 `: r& w0 e
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% s9 L5 e* H8 d' O" o; uemerging markets have no problem with funding. |
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