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发表于 2011-9-17 13:16
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Current situation
% _. Y* g2 Q4 R6 b5 P The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. x$ z/ E1 R, ~3 N5 S
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( ^ E: p- _) b, Y5 x; ?
impose liquidation values.
6 _% M% u, T0 z7 l In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ u: X& x2 ~. A( m- ]8 G5 f, UAugust, we said a credit shutdown was unlikely – we continue to hold that view.4 e7 T0 u1 u- X) A6 n5 h$ s" D9 a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- }& m5 R# Q1 M; F+ c8 A4 X
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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k, I/ r/ P s! T% lA look at credit markets
9 Z& Q. y _8 ^0 R( X! D Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. F. q5 T$ ^3 G( k9 ?7 L, i: M
September. Non-financial investment grade is the new safe haven.' ~5 L2 w( J2 n$ @5 J* U: [2 z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 k9 z# c' [- E2 U2 uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' [5 g4 q* x% d+ h+ @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! z B4 q8 D+ J9 v6 ~( }7 C5 Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! c9 t$ U0 }4 W; E1 ]. V
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ Z* ~* |6 `: L
positive for the year-do-date, including high yield.6 F5 O! b4 p+ E8 y3 Q* X; ^/ e3 _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 K: H! h9 q& x7 t: H4 A
finding financing.) j+ u3 r4 z- ~; V) Q: x1 m B B
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* b7 i$ L7 `5 J4 C( C4 k' f8 ewere subsequently repriced and placed. In the fall, there will be more deals.8 V' o5 @! J+ f8 r9 q | Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ p# a, ^3 \. [3 ?is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) u F* L6 I% h2 p6 A+ ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 ^3 B( l4 e3 `. O% E( R# Kbankruptcy, they already have debt financing in place.
% X% x8 z9 N3 U; L European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! h% }: ^( q) ^8 ~0 ]
today.1 S. e9 q" }1 M I3 N' Z k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) N; I: D! y r! q R' `9 ]' femerging markets have no problem with funding. |
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