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发表于 2011-9-17 13:16
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Current situation; }8 @8 L# B! f% B" F; \3 H
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% I. @: B1 P/ ]# N4 Tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may ]5 ]' l7 f6 U+ m( d- Q
impose liquidation values.
$ T5 b9 y* y2 y2 c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 @6 i% y. {1 t2 J5 I9 zAugust, we said a credit shutdown was unlikely – we continue to hold that view.
|5 Y/ m: f S0 F F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( \- ^( d6 d% O* Y. _: _' z+ Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. G V7 O( j/ nA look at credit markets1 a5 j) Y" {" z: y% U6 z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" w6 x2 G' y% ]7 k- ]) m
September. Non-financial investment grade is the new safe haven.- e# X3 y8 @/ r7 v0 f G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 D+ ?2 k. K4 j A7 ~
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ o( \4 ]8 x# A. y; p6 X" ?& N2 X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- y+ _* X* W- Z$ |, X; i7 ?' F$ ]+ Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# O/ [+ S0 n7 oCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& H4 f: {4 D: ?) ~/ J4 o; Spositive for the year-do-date, including high yield.; u# p& |2 x" X; A8 K, R- X0 f' Y. Z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. k" e2 v! G; W+ J# m6 W; U8 V8 u
finding financing.8 q5 j! T! {1 ?3 W- s; `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, Z6 z4 C. h3 n9 K1 G! X' V% A
were subsequently repriced and placed. In the fall, there will be more deals.
8 ?1 O7 }( @# W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ I% a$ L6 C$ U T2 ]; m- D
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: m! q% a2 _6 a. a0 _0 W
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ a) T+ d" I# C5 d
bankruptcy, they already have debt financing in place.
, k- l. x0 C; M$ T$ F European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. H! U4 I; I1 ltoday.
+ C9 o& d K1 W- ?- z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, m0 Z. t" g5 E: C6 Nemerging markets have no problem with funding. |
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