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发表于 2011-9-17 13:16
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Current situation4 G& e. L8 M' `! L \
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, k b/ D: c6 o6 v6 A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" I* P2 t; I: y" J
impose liquidation values.
. W9 d6 h4 ~! u. o In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 p$ Q6 X% A' K: @( E. K( @
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 p) G; B% {- r9 V, G. }3 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; T# k" U2 Z- J* K1 Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. X1 d6 [5 ]7 Y" @, x. P) y
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A look at credit markets$ e F- t" G9 S j
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( u% Z$ l1 G+ n8 o1 A% JSeptember. Non-financial investment grade is the new safe haven.) y( ~7 e/ r$ I! `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; _- u$ g2 A( I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 b& o5 L9 ~. O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" V: X4 m3 f$ R& t# d! H, zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( m8 s. B" L' t, ~) I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: f! ]) E) i9 @! X+ _1 v
positive for the year-do-date, including high yield.
; o2 C8 m, `+ r+ D' m! t% j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% }8 D }2 S2 v- efinding financing., ?- Q8 j; u8 c+ H* j9 d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! v: S8 N r' j0 H
were subsequently repriced and placed. In the fall, there will be more deals./ n/ J' r( C0 I% A$ D& [
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 w, Y5 }! T* `3 N; s. `
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 B* A @/ z6 O: E6 h# e5 T# A0 [! Bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 \# a1 x7 S1 H8 v5 z* V' p
bankruptcy, they already have debt financing in place.
4 D' l# [" ?) H2 r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& }7 e7 i4 u) n i1 f5 @6 G2 L& Q6 D
today.
+ [! E9 e5 k# J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ B' A Z- [5 ]* \% demerging markets have no problem with funding. |
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