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发表于 2011-9-17 13:16
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Current situation3 L/ t: p# }8 [, A( v. E7 w
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 u' I# _" Q% i Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 D6 V6 v( G8 K' s1 I
impose liquidation values.
! q7 \6 U. t+ @: v1 ? In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ Q8 t* C3 O- k
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ o1 y# E5 ~* d; B5 Y% K$ n* F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 ]) @3 C1 s$ y, S _
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 X. @5 i( ]4 \' Y% |A look at credit markets$ w, [, j+ ]8 u) A9 d9 d* k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; D/ c( k5 ?8 D I" y% W6 i9 H; ASeptember. Non-financial investment grade is the new safe haven.
# z9 f# u6 {( y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 Y# C7 \0 [ }. t' c, x+ l4 Sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 v) ?% q$ p& z6 O W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; ], c5 u8 W+ K' i- i4 Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# S3 _: S( F( w& i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 L* E; ]' o, K5 y
positive for the year-do-date, including high yield.
( Q& e- f. U& r" [, P4 G5 z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; H/ X& r c9 U$ X6 h' [
finding financing.
1 t: [4 e4 c- \; \ {) L+ W$ a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 _$ C' b+ M4 h5 G- t7 f6 }were subsequently repriced and placed. In the fall, there will be more deals.
! Z' E8 B* H& ~, J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; G+ c+ ~6 Z9 e3 c7 a/ L" Dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 U: Q- @# @7 M3 ^5 l
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( h! A1 | a: T& lbankruptcy, they already have debt financing in place.& G* w3 ]: M5 S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 S8 k ]. C2 g9 S
today." x8 t M0 j" i; G; n- a" }
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& j* w- C% s, I
emerging markets have no problem with funding. |
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