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发表于 2011-9-17 13:16
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Current situation& H8 P. k; O* z, Z- @' T* q7 R+ ]+ D, k
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& K# I5 j% y5 y0 s- p2 t6 b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. O" W4 `; e( _: Fimpose liquidation values.
; B) M( \/ `; @& J& q; f+ T( d In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! {* P4 w! c: c/ W, x4 nAugust, we said a credit shutdown was unlikely – we continue to hold that view.
& Q8 J4 r) _4 l; R5 N; Y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; y' t! ?0 E6 S1 v, S fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' Z& ^$ M* x8 T' s4 x7 [2 A
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A look at credit markets
. g6 _, k; c6 q9 J, ^ O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 A7 u$ f9 O* C3 r; T! S# q
September. Non-financial investment grade is the new safe haven.
8 d8 \9 Q+ W9 {- i8 J High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" H+ E: A1 h8 Z$ `- ]. {then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" \. W' O% l) K8 h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 B/ v5 h8 j7 J; b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. h4 b) n. R- j- m% r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 K3 L! q1 i& I3 G' m1 `positive for the year-do-date, including high yield.5 `# S1 w9 B* ~9 m1 X" n- j. \
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; y7 q+ Q6 {" R' B2 R. |finding financing.; U7 _' J4 k( C- X
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 Z/ L+ G. j; U7 j( i1 w( D# x: J$ [were subsequently repriced and placed. In the fall, there will be more deals.8 X- F* K8 ?. ?: f2 o \
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# n+ O" y6 X( {2 l' {$ W# T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: j# Q' G. v/ Z; S+ P$ Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- e# u3 X2 |0 d2 V! F% u/ Rbankruptcy, they already have debt financing in place.9 f" b% f+ ?" j' H) D. D
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 b& S0 h1 p; e v
today.! t' `3 S6 |7 {5 a! Y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' D+ ^7 k1 k2 X5 m9 oemerging markets have no problem with funding. |
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