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发表于 2011-9-17 13:16
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Current situation; q; N9 n9 {& C' ~& _& c# |3 R
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# D8 R1 K" j+ A2 Z! m0 M5 j
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! P) x% q8 n2 o
impose liquidation values.' {+ ~ A' [# O$ ]- Q* e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: S1 j# [* v9 x% h1 z5 ]August, we said a credit shutdown was unlikely – we continue to hold that view.
. E1 R3 A* L, ]( B) \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* U0 l# ?# _6 U0 t: o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( J, i7 U# p" i9 l5 U/ C0 r" zA look at credit markets
* J4 _) j" A, e/ H3 ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# B) a3 t% ]9 }& t
September. Non-financial investment grade is the new safe haven.. {' C7 f4 o6 r, T
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( s' G+ I: b2 l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. {2 B$ o+ r1 r$ t8 K6 v* ` i+ b) T1 obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 ~0 L1 w. X/ P! e i; v$ X7 S
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 E2 Y3 G' z0 v; y( eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- E# S' J/ u6 F9 spositive for the year-do-date, including high yield.
) v. m+ f" U, u5 A' A Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* @: a9 l, k0 n1 s( s% Kfinding financing.
( g5 n" }# Q6 j! T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 ~2 g& E/ c1 E7 Y$ bwere subsequently repriced and placed. In the fall, there will be more deals.9 ]) e8 ?, o" Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& [. c& ^( V) yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 y+ y- T0 u, o: e3 J# ^# Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) D$ ?# W, A6 c3 d3 {! jbankruptcy, they already have debt financing in place.
6 e' A5 H1 J, C$ ?4 O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& w+ k ?' s* }
today.
F* h. b: ^* k# B Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% A+ D8 f% A5 x; A4 semerging markets have no problem with funding. |
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