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发表于 2011-9-17 13:16
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Current situation! Q2 \6 \" C7 Z% O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# ]# i8 i# K) ~5 o) g& Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
U9 `6 |7 F3 I) Q6 Q& Uimpose liquidation values.: f6 f8 B7 |; o L9 a8 D3 {$ y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: M( k' U' y" a- C' J* Z# K8 h6 CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( G# D/ X5 N6 g6 r3 G: V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! ?! F/ B9 y C+ V, q0 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) x+ F, N) {( k% a5 c3 {
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A look at credit markets
3 ^. ~2 F# `1 O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 [9 x$ u$ y9 } ]& rSeptember. Non-financial investment grade is the new safe haven.4 S4 R) n' N6 o# i g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; o6 m! t W' [$ j5 t8 ?- L- Xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: E- @" T6 [/ g7 _7 ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 J& N) L0 p Q' x- |8 X4 y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, u c; u0 C& K& V; `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! u! M2 P8 f5 m! X* A( ^5 o' upositive for the year-do-date, including high yield.* R/ ], a- ]3 i' z9 P9 E& f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; P9 t: b9 ?4 \* L2 Kfinding financing.- f f: N- C" r6 Q: x. a7 }5 \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- |6 {! g1 r" m* a# ?; H( zwere subsequently repriced and placed. In the fall, there will be more deals.
: } ^5 I a2 q1 M2 H% k Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ d W" C- V5 B9 C1 Z9 [
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were3 H/ J( ?6 `9 E9 R
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 v% n/ q, A" v5 u+ v c+ b
bankruptcy, they already have debt financing in place.
! q5 f3 Q8 k' s c. m- m European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 {3 Y g6 c, \) I9 U |
today.
4 r. E2 g1 z& ?9 A" u Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 U b9 M. c4 m: b0 qemerging markets have no problem with funding. |
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