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发表于 2011-9-17 13:16
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Current situation
, Z3 U! R7 ~# Y0 z9 S& B1 _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 u4 }$ T/ P9 }, h7 M7 d8 has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, ]8 \ `8 {8 Q) P* [
impose liquidation values.
/ l/ U! b' L9 d6 \" F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 T0 D) b9 S' D' H, W6 T
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ c9 f( M& z2 c The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 x7 X" s0 I: f# o. G
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets' \, W' I- ~3 E% a7 p0 T! `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 H3 q* T' l3 U& E# `September. Non-financial investment grade is the new safe haven.
+ q/ {1 t1 Z$ o( M2 X) z! | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 v: N( C8 N1 n0 W$ E0 @, \$ B9 y- Othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" ~% N2 `/ I1 b; q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 [% L$ n3 L6 k+ U5 F* paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 }3 o( o4 j* L0 O5 R( C
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! F1 y) O0 S9 B4 D, b4 q* Ypositive for the year-do-date, including high yield.) y; n" j3 `4 m' E. J7 N# b
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' @' X3 ?3 m+ @finding financing.
! [1 p. S G. `6 e+ p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! H$ Z" e0 r8 U
were subsequently repriced and placed. In the fall, there will be more deals.- m- Y# m0 g; I, V2 t2 B& E' m; ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 x. o. o. `, G/ y, v! V' f: I C2 G
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- b4 M" @8 s# H* M8 F1 r. n- E: W, Q! s8 i
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 X) M- J& L4 `( r& }bankruptcy, they already have debt financing in place.. y1 O O4 X0 q- A1 W
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: E+ a; S9 @5 R N Z5 m2 Ftoday./ p7 t4 [( t% ?" g3 }% c
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 k& U2 Q4 F! ?% D3 u" |5 d1 p( nemerging markets have no problem with funding. |
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