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发表于 2011-9-17 13:16
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Current situation+ `/ ~3 W ]% L" C% F- a# c4 d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" K) G/ _4 A3 J. H7 G* Nas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ Q5 Z, J: ?! r; S& G, H
impose liquidation values.
/ B% B) A4 {) Q! n/ K In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 I4 L" f% u1 k% `
August, we said a credit shutdown was unlikely – we continue to hold that view.
! _- N0 l# V2 n e The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 R. J9 t- c$ L5 t5 [
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
* ~9 d" m6 f! N7 i Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* K1 X% T+ n7 `September. Non-financial investment grade is the new safe haven.
' l7 l3 G+ ]; T) H O2 C3 y0 g High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* Z6 r' o+ B. s% j+ L% }+ ]# L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 {; ~" _# A- F8 S9 @8 [. |5 ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
5 O w/ _: f% ?6 q8 i, x! Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; c# f4 k$ Z2 s5 f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 a; q7 E7 ?. t, g7 C2 Gpositive for the year-do-date, including high yield.
& M; Y- t7 J! L/ c3 X2 H5 M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 Y1 t' Z1 }) Z' M# p5 [# C% ]finding financing.7 A* h6 L& f+ b& h" P# ^
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, {) R; o: o$ Gwere subsequently repriced and placed. In the fall, there will be more deals.
% i# ~6 Y- ?* ^9 h( \& i3 ]' k3 @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; Z9 c' i1 S; o5 k* l. s+ {
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 g. D+ o2 E6 ]9 t5 N+ O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) t2 V1 x+ Q& y# i' D: L
bankruptcy, they already have debt financing in place.4 b$ R& K" v X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 [$ ^. e2 T9 ?! Htoday.- D9 b5 Y, B! H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, f, F& k1 }: ]8 ?4 w( _emerging markets have no problem with funding. |
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