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发表于 2011-9-17 13:16
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Current situation
/ K+ G' C, Z# t: Z0 [8 y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& z! A* d9 E% r6 ~% K/ r0 a! Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; b: g2 m8 ], V; K( y" k7 ~, p
impose liquidation values.6 V6 @/ j4 T' ^
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 ~% O$ S% E( F% z9 U) c
August, we said a credit shutdown was unlikely – we continue to hold that view.
6 ^ }2 s( p2 E$ p" Q! z3 f The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 Z9 ]" ?; j7 r+ C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 J; l) ^* Y4 o6 e+ a
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A look at credit markets
" I9 T' @- j8 c/ Y; D- z/ d$ Y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) S9 C6 ?- y/ y6 q* ?: k7 u
September. Non-financial investment grade is the new safe haven.
g y" r! J( T" G) a' [/ W p/ J High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 A# T+ @, O; S3 v% V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: c0 y. N0 s6 c+ U
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have }* t* v0 ~" Q$ T- T8 X- U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 x& f/ T: T: K6 X# D, YCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. U2 G. w2 W# P |1 s
positive for the year-do-date, including high yield.; j, _- w% @$ o4 M
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ z+ j _1 g5 h! v& o% Y4 Gfinding financing.
- J) z0 u5 Q' b4 m" X4 b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) t3 Z* L B5 v+ ~" ~8 F% _
were subsequently repriced and placed. In the fall, there will be more deals.; ?. i' C) \! J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: |: Y2 O$ d: {6 B7 K2 dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' \, [) w: |. O( I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& ~2 G ~7 g# D( ?bankruptcy, they already have debt financing in place.
3 |" U1 g; n- p. ~7 d% c6 [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 _1 ~: X* U, E O1 o8 [+ q' j9 Z! w
today.
+ T( e/ ] n; ` Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ D3 I$ Y& @! e1 remerging markets have no problem with funding. |
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