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发表于 2011-9-17 13:16
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Current situation
4 X( {# g8 P7 r8 [! {$ @2 v- U0 }! \ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" s. P4 I# L; j9 I! b. c- i. x/ j
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! j/ t/ h" d( }impose liquidation values.
8 h# t+ \; C' a8 J In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 b3 C5 _' {9 i1 c6 f; a ]August, we said a credit shutdown was unlikely – we continue to hold that view." K; U: E6 B+ M: E2 P7 M; A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! L# c2 m2 i o# z) x
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
# k. P% [2 z: R0 r. s3 w { Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ K' @. O% K3 n! i! j7 v9 jSeptember. Non-financial investment grade is the new safe haven.
8 n+ _8 A/ w) p5 D/ F7 f) h, | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 z% y0 _3 c6 i3 w0 Z7 |then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& s. |: G5 `9 a3 q9 S" t/ N
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 X' O" M8 m1 y3 |# Z/ s, Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ I, ^) ^3 Y$ c! o. b/ h/ d2 I+ F5 y: ICCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 ?$ M+ b+ [( D2 v+ x+ P$ {positive for the year-do-date, including high yield.
8 a- }* I, a3 Q( W8 g/ X' z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 e7 u! _2 b2 V3 Y2 i: B2 [7 H8 |
finding financing.
6 ]' {/ k6 o5 w$ k* C& W Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 r; n: Q3 B6 Q& l& ^- V1 P- cwere subsequently repriced and placed. In the fall, there will be more deals. P( |& m- K$ e! j! y3 \& L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 ?3 ~4 p5 [# ]" ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" Q$ E- l) F. ~% c; o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( L" Y' l+ i2 ^. g) S6 Zbankruptcy, they already have debt financing in place.: O3 x% {/ |7 A( r
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. q ?6 H$ ~, N. S/ ~ O: }
today.5 G: I. \7 T+ m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 t5 w. l! Y0 H* `. ~' qemerging markets have no problem with funding. |
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