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发表于 2011-9-17 13:16
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Current situation
5 G: B; M H1 E7 p' \1 u- O) ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" ? Z4 [/ _# N$ }, |9 I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 v8 S- r& Q1 H6 v* ]! |& a4 |
impose liquidation values." a2 t& z* @8 J: v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! {; v% ?/ e% @; y5 z! w: h
August, we said a credit shutdown was unlikely – we continue to hold that view.
7 ~0 x0 h/ h8 |5 ^ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" F6 J% c% q5 Q# V* M" hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 V; C; Q1 V, g2 Y# |A look at credit markets$ y$ i. r# {( n! `1 T* Q7 Y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ h: d$ l" S& Q) k2 {& X& K. aSeptember. Non-financial investment grade is the new safe haven.& ~- n* Q _6 p" N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& Q* y! E# P) s/ M- e& g0 i2 Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 B" u4 r, g9 e
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# `+ r& Y. K+ z9 |access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( ?5 e, \$ i$ t; pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 o& @9 l4 n5 [5 e5 L. L( B- @7 b# x" Y
positive for the year-do-date, including high yield.! v/ }# U' f1 p' w0 c. j
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# Y: v/ i/ M! V0 o" E5 f) @- k6 _4 [finding financing./ u0 t S0 C ?/ h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 e" n- C/ K0 z! H+ I/ a
were subsequently repriced and placed. In the fall, there will be more deals.
* Y4 {( @) ?0 C& C! j" ~7 v9 C8 \ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 ?$ \. \( `2 n( w4 y; o& B, Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% a- z3 m1 |6 F" O8 I; [. r2 Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" c a! u5 W/ B7 G; N
bankruptcy, they already have debt financing in place./ J1 D- M. Q9 w1 s K' k+ v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" h1 _6 p+ r7 n) ?! ?today.( h& m v H" }. w" C2 a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 k2 g- }) ?! x& n
emerging markets have no problem with funding. |
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