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发表于 2011-9-17 13:16
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Current situation
' I3 H v7 x) k3 g* f( w The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- U* s5 }: R- w0 Q, f/ L: O$ Jas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may8 w. e" v$ B- D) [9 ^6 R1 I
impose liquidation values.3 J: L- @' E5 j" ^
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' d: k- P. t) B. l7 J5 V% {$ {9 Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
% e) _2 X$ @$ t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 L4 k- F- V( v: t5 k
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets2 \7 ?* J/ P: w5 F M, S# n
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! s9 Z. G$ w0 R% L7 Y5 F
September. Non-financial investment grade is the new safe haven.6 M1 @0 @5 F8 F2 c6 n( x4 v6 E
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& r d B3 G P# z7 t6 V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 v% `) R. \- s' L) ]3 Kbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" {) Q+ l' x7 yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" q8 e, b# J( `" L) {. m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& ^/ U* r; [) t% X& epositive for the year-do-date, including high yield.
3 h6 W4 x$ B( s# Y3 `% S6 C! S7 k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' G. U) C( @' C2 ]. F$ Q! Q
finding financing.
& U) \ I8 m9 D7 m' ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 L4 C a. _$ h" e, L
were subsequently repriced and placed. In the fall, there will be more deals.' j+ y/ q3 u2 r2 H+ q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and Z( L/ [& t' a0 c
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 y7 \ [3 p5 N3 h5 c! B1 u# j- e5 Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 b! @; @) u, ?: @4 D" Tbankruptcy, they already have debt financing in place.
7 }) S5 s( e' {+ z1 P# | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" X+ K. ~! ^8 J, ~
today.% I7 Z" q& ]0 H) @5 h$ N; t% ]
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) m# R* z A6 L1 ^$ t M
emerging markets have no problem with funding. |
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