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发表于 2011-9-17 13:16
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Current situation- E0 Q: D; y$ m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 z9 a( O' W% E m+ Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- z w3 C3 E+ q4 e5 D8 y# A6 dimpose liquidation values.; C$ z, v. c4 K1 J! I7 l; J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ n4 j. G7 O5 V7 Q1 _# f5 U
August, we said a credit shutdown was unlikely – we continue to hold that view." T% N2 @" Q5 D: u) J/ T8 G! J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ I0 }4 c, C$ M) P# U4 M# \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# W3 O1 E& z, z9 @; g
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A look at credit markets
9 r3 d6 j" w- l" \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* ^* }! @! C8 z2 m, l
September. Non-financial investment grade is the new safe haven.
& b1 p9 k+ e+ [. ?2 g$ ], R4 ]) |6 n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* F: Z' I5 s/ D( k. J6 s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 j$ k4 o$ H1 g/ k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( ^# z& S5 b" c- j' [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# n; A) I% a, H2 t$ h
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 U% A: u+ p$ t4 I
positive for the year-do-date, including high yield.
" J- X& p' G$ m4 X$ k+ b9 h$ G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& @, y3 y- a/ s# s4 `: T5 _+ w
finding financing.
- e# t% }: F) q4 R7 e @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* j7 S ~5 e7 k$ ^: R. K& ]! _! l
were subsequently repriced and placed. In the fall, there will be more deals.
) P8 L) n1 N4 u( O8 Q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# ? \4 \0 p3 d) Y- w; dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: X5 E/ e5 U0 m' A, zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
@5 ?6 e$ X1 X4 Kbankruptcy, they already have debt financing in place.
3 M# {' Z6 E/ \% J! V# A European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 u' g3 ^1 n) c' u6 h
today.
% Y% E, f6 A, e/ X5 S3 i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. [* y2 \ W: C# k
emerging markets have no problem with funding. |
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