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发表于 2011-9-17 13:16
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Current situation
) F3 p4 e- A) b3 d' D4 |4 y3 Z$ n0 A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 R) }7 U) _1 J1 ~ `& B: k9 Was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 f& S7 ?+ L5 @5 j
impose liquidation values.
& q( r7 E- V/ }- y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ o% w2 W* @3 \- @
August, we said a credit shutdown was unlikely – we continue to hold that view.% F( ~7 M7 _) Z/ I7 J% v+ r6 w' f- e2 T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- J% f, P# z3 w0 Q: s# Escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 a3 ^1 n0 A" S) C+ m0 X
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A look at credit markets
5 h4 x) ^3 V6 g6 K i1 ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ h8 [. s h* ]: `# m1 c9 G2 xSeptember. Non-financial investment grade is the new safe haven.
- V9 }+ |* K) m- b% s. b+ ^4 I4 F q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' R3 d R) W# N& p" U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& x3 h% _) X9 `6 P6 Qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( u' u, b/ t8 r8 h$ G
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 O- H# E1 G8 @9 [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 k" H* n9 Z* T3 q' L
positive for the year-do-date, including high yield.7 B6 g4 {0 Y+ x2 u7 X' \
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 i+ } s3 g. I" D$ s
finding financing.
2 @# b- D3 I9 L Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! X* S- }8 w" ^were subsequently repriced and placed. In the fall, there will be more deals.
. H! v9 ~8 S# F8 D8 D, E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% ]2 {8 E. r" f: z8 R$ Qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ } s0 D( a5 Q+ q1 r' ]
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 T, A1 P- e t8 q2 c0 ~& V5 a
bankruptcy, they already have debt financing in place.6 G7 r' C( L0 }8 X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- C/ v9 }6 J6 ^) M" L7 [4 R% X
today./ f! @# r# Z9 ^: W, o+ Q1 i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
8 q( k9 L2 C* L1 D" V6 Jemerging markets have no problem with funding. |
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