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发表于 2011-9-17 13:16
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Current situation1 v# o7 f/ {% V8 x$ C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. a" n' ]2 w: c3 R# x/ u6 J
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! ~" S- f8 G- W/ H& i* timpose liquidation values." @, H, p4 }$ i8 n9 y+ A* Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ b7 p" c! A" R$ k
August, we said a credit shutdown was unlikely – we continue to hold that view.
' ~; O7 ], z9 F8 F' B7 c) I# D8 T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% T/ u/ N( S! L! l/ Sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
! k* U+ i; T, o8 R7 W% H8 j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 R5 s( j7 b& d. Q7 v/ HSeptember. Non-financial investment grade is the new safe haven.
\; [, c) T( D. S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 {* R! ?6 U, Y6 e2 r: C- ^then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 g$ r& ?; R. d2 i2 z1 N$ Q8 m
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 D- [6 w% ^' k$ P' ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' C5 U4 \& s& rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 {% ]4 @4 r" {, j
positive for the year-do-date, including high yield.
# d- P9 z! p3 t5 c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 L/ h! ^: p/ \, n& Vfinding financing.
. k% ~* w) F; L8 j Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 t/ a4 {, I% }* u
were subsequently repriced and placed. In the fall, there will be more deals.
, n8 U+ ^5 k/ m& @; J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and F N* F& |0 w* M2 i) y) w8 O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* a* a% P- K" r6 z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 J0 m6 T5 d2 ]5 d6 J. ybankruptcy, they already have debt financing in place.
5 V, N2 c! f) |8 F5 W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 n7 w! [7 }' [$ f) y/ ?& ttoday.
2 M1 R; ` W! e/ x* h T; U! v Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) d2 e- u6 w* G' D
emerging markets have no problem with funding. |
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