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发表于 2011-9-17 13:16
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Current situation: }/ E' Q; F* F8 \; O* U
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 V% Z. G1 V7 H% Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" V, r$ z0 F/ n" i Q! U5 N- l7 i
impose liquidation values.; P2 R7 W8 U) B) ^. Z( j
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; D( g8 c6 C& c0 X% _+ |- o2 A
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 j! f F" `$ F. b4 z5 _; a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% J( O5 a4 V6 J0 {6 C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 a& S4 F2 O5 A( p/ y/ G
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A look at credit markets
; V' Y7 J6 Z) T+ O" x+ H( ^( q/ B Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 m% F( k- Z# X+ }
September. Non-financial investment grade is the new safe haven.
* C4 ]* c' q* K. r4 D, _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 {; m$ w# p0 A. J* V* x% x: |. I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 T! m4 i5 y3 _3 a5 _ vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" U$ I5 q6 d; L2 l! a* W+ h1 qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% j9 c) z4 U% _4 B" |CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: i6 Q% d+ N6 P6 Vpositive for the year-do-date, including high yield.
# f8 O/ ?/ k) m+ v w. w Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, |* B \, M, ]% vfinding financing. j1 r+ p2 V* F- F0 l# c, {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 g5 M& k1 o) Mwere subsequently repriced and placed. In the fall, there will be more deals.
' m3 f X2 Q, b5 U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 x- S+ Z0 F4 F1 w. L' Q* \- l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 n0 o2 t! Z8 u" V" h {7 Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' [: r2 T+ ~( V/ ?1 |
bankruptcy, they already have debt financing in place.
% G( D. |; [- M N. K# R$ u4 M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 t8 t" D$ i4 s7 Etoday.8 Z/ U% C4 D u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: T* h d$ b% _5 j3 D
emerging markets have no problem with funding. |
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