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发表于 2011-9-17 13:16
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Current situation. {! A7 H [5 H# X6 F5 [% h+ b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 P- f* J. I a- c% ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' t) J- L' t; Q" I+ q, s6 K
impose liquidation values.
( B$ M$ l: I g/ x& q% w, }* v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' q% M4 d) S2 i9 @% w, r+ s1 n' y8 q, QAugust, we said a credit shutdown was unlikely – we continue to hold that view.' E# ^7 J% ^: Y3 V4 F; D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' e9 ?# d$ c8 K. N% B1 kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 c& |9 _9 s0 ^( E
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A look at credit markets3 F) _; k. |! r/ T
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 `# x/ a6 h- `
September. Non-financial investment grade is the new safe haven.4 Y3 q6 m: f2 n0 {, V- ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; ^: G( s5 o( C1 e& {1 N
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& z# h6 D' Q% s; ? G3 Ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) ?' \0 g3 a5 S8 G, ^8 z. U1 eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 I4 ?+ A7 g0 X5 u) QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
k. {' w% i+ }* Ipositive for the year-do-date, including high yield.( p; t1 u- ?* T' p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. v- _# A# n. j9 E$ S: b5 X
finding financing.
- E- D4 o5 C( P: ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" P% {2 J! n$ i- v) @7 g7 O
were subsequently repriced and placed. In the fall, there will be more deals.
6 Z" @7 }0 Y( k4 M0 i& S# L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% ?$ t$ H1 ^# y* t9 t$ j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( r# X u+ J, _1 A. Y4 N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 A" W0 Q4 ]; K; o$ G) `3 e- Obankruptcy, they already have debt financing in place.- u4 g4 t- _) Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 W2 a3 @$ w3 W: z# L/ n( J
today.
5 u8 L m% [6 m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ E/ n0 u. F0 h8 M J+ O
emerging markets have no problem with funding. |
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