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发表于 2011-9-17 13:16
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Current situation
, p& ?* m( ]# Y' \4 e8 |4 k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ c ~) E# R J& Yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, r! t* f& q W! p( uimpose liquidation values.* n' |. `- N0 B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 s7 g' O# x; g* [August, we said a credit shutdown was unlikely – we continue to hold that view.
( e% g: t$ k2 G0 [, @) d The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, D+ O. v: f# U! k; q. rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ @* D: N: ~1 V5 H/ L1 m C
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A look at credit markets
; V) a7 j* v7 G! q# i1 a/ _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 q; Q$ t' G0 ?September. Non-financial investment grade is the new safe haven.
. U' @) [9 d3 P$ _9 m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* _0 n; M& i* e C( G) fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# p% Y6 B. W, L4 W# ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: g" w6 J7 A+ G# Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ ?* p# j Q# i, xCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( c1 h) i/ O, r+ N5 X
positive for the year-do-date, including high yield.
: y# K+ O5 P4 w# T0 P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 q% F) `* k! K) f0 L. Lfinding financing.& I& A" Z3 C* f6 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ S. J9 H( A+ J
were subsequently repriced and placed. In the fall, there will be more deals.; O1 [; e- J) F9 m+ Y" S
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' Y( }6 e8 X; H. g# j; d) His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. g3 R! m- U% J) w) Agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 S. U. e( W& v0 o1 vbankruptcy, they already have debt financing in place. P" y2 H& p+ o2 n; f6 m7 i
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 q' r% ~8 J4 W s% l
today.6 V2 j0 m6 Z: Z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. c+ U* l3 `& a" w% Y
emerging markets have no problem with funding. |
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