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发表于 2011-9-17 13:16
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Current situation6 r7 N' a9 C3 q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: ~4 O8 @! A K! b2 Bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ z" y1 A6 C$ d' a+ d2 K' Cimpose liquidation values., X3 z, J: e: _4 ~, Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! B& D( c% Q6 B$ L5 oAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ ~$ `5 `7 C, s/ w The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 n+ ]' g, ^) N$ E6 M5 G m4 a/ Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 P3 [! Y' o) i5 w
4 `0 _8 ]4 X8 j/ R' O
A look at credit markets- L$ u, g! O2 k& e N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ W* z" A# S( D, a; P, x( a
September. Non-financial investment grade is the new safe haven.
5 ^* [/ c8 j7 Z( e% K0 e High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 ^* |6 j- S. H2 a1 T f2 M1 fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; B+ s/ V, B" D) i1 _
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ b! s( b a X1 V8 q; e/ J
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ u2 l! x- m& m" |, l( C- g2 l
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" H; x. e& ^6 a1 x9 O# w: dpositive for the year-do-date, including high yield.( S6 k/ `$ h2 E
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 s. g& _; I: T, K5 w# w7 X" n! Y
finding financing.1 S1 {& x- Q& V p( e: I
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 t$ X, B( \7 t; ~+ l
were subsequently repriced and placed. In the fall, there will be more deals.! H6 D) X" V& e- E
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ Y4 W/ J T$ `) c& ^! K: ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# D( ^( y4 x& G, {) g0 Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: b9 C2 j6 t0 r- @/ T' _bankruptcy, they already have debt financing in place.
( f. I; d c, V( Z& g' n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 }8 x, I3 [% P: r9 V* {7 o7 utoday.2 u0 q$ I2 h7 F) E# F4 s7 g" a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! E) X9 N6 g$ y) s) V
emerging markets have no problem with funding. |
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