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发表于 2011-9-17 13:16
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Current situation
% e5 X; E% M: C& W: x% v! }7 j9 I The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) S$ p% D- v' o2 {, L' das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ r+ {0 w9 B( x! N U( {. a
impose liquidation values.. }0 s8 L5 o- j0 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! g3 i# T0 e% r; ~; mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" w; c4 [) i) r The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 {' w& y- T9 t& e1 W
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." i {6 B( n! a, Z4 s
5 h" ]1 | M! R, }; B& k/ N) H
A look at credit markets2 N3 {% k# X( t
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# P, z- t5 K0 Q2 i3 V# [
September. Non-financial investment grade is the new safe haven.& h4 {; b# u5 V4 d ?% g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 M; i* e+ F0 O" Ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' Q7 F' k! i7 z. `. }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 P0 Q2 R+ f& ~2 ?+ O3 e3 `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, d' ~$ G# E4 u+ t m8 DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- P% l( I3 S1 y; G* F/ C6 b5 Y8 t
positive for the year-do-date, including high yield., L* R' w: M( ^4 I3 G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; f a: ^% z$ j! [finding financing.( c- i8 w& \. G! E# \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 f$ W) e9 d6 N( a: F5 f4 d7 r0 z/ v0 `were subsequently repriced and placed. In the fall, there will be more deals.
( e& ?- X7 H$ u$ h: {" i- O Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ Y4 G0 h* z. `- q6 i$ }& }. lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 }9 _) ~. J7 q& i. D, m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ [ P: B7 g S! A, cbankruptcy, they already have debt financing in place.
/ ~2 O: X/ M* ]7 | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* r& `7 v0 B, otoday.
0 j O3 d" O7 P3 {6 r0 y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 C" R: ? d; }' {& |& R
emerging markets have no problem with funding. |
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