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发表于 2011-9-17 13:16
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Current situation; R+ v3 ^# W$ q) @2 s
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 ^; X( C/ y3 k: \( q; Y; C% ~' Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 M. e8 ~, Y# h- d0 M' V' ~9 Z9 E. p
impose liquidation values." J7 Y: v# L: w* i/ _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 Q9 {1 W- r% o" K) `August, we said a credit shutdown was unlikely – we continue to hold that view.
g4 [8 q+ X$ O$ V! g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& T% D/ a* z* L# O* _: h( u+ Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ Q0 i1 @0 E( V7 x0 w! ?
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A look at credit markets
$ F2 h. ~% b. |+ I. ?3 U Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; R: n7 ?! e* C O' N! i+ \" lSeptember. Non-financial investment grade is the new safe haven., V# {4 C' ]4 ^' E" K( b( D3 k4 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ O7 J4 K' X, r: v! s, {/ x
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( T' q9 V: R& {' x5 Y" y% ^% mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 a, [ d' J- K3 P" q9 P7 uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; a/ p0 }5 r; J! K0 R+ }# X
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; p5 S6 Y2 `% k; s3 A8 w$ \positive for the year-do-date, including high yield.2 `& j6 M/ Y+ t4 Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" M& {6 r; F& F" C4 Lfinding financing.
, n% q3 T' P$ I% e& y5 l Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ }# `) g3 B+ u) @were subsequently repriced and placed. In the fall, there will be more deals., [/ V" z5 A+ g& j
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. a( t B$ v0 {( T x' D5 _$ eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
o! N9 D& {1 ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 X% N7 @: }: {, o, r9 Z3 c' [# ~4 ^% t
bankruptcy, they already have debt financing in place., J7 S) S! ?) p0 t2 p5 \) t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; P, \, K/ B1 S! J
today.
' L# E8 w6 @) s% ?! f# f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, A! d3 C+ H; ?8 S% j0 F8 N, H
emerging markets have no problem with funding. |
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