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发表于 2011-9-17 13:16
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Current situation) p( Z; R g4 n$ d7 h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; e( q2 e1 |/ c0 d4 v- R) cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! o3 n V m' z% B
impose liquidation values./ v, Y; E7 y/ C& g+ Y+ R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, j+ h4 W3 q! ~) V# |6 r# yAugust, we said a credit shutdown was unlikely – we continue to hold that view.7 t% A* r/ _3 p; N
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- }; R5 R1 }4 _# Y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets- ~8 c# I- a& [6 r! n
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 T5 p! s$ S) i
September. Non-financial investment grade is the new safe haven.6 i! ^: x3 K4 I2 d! t% M" s# A
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 P% M5 s' r9 ~; }5 N( k n8 }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
K2 S* Q! h9 s# Jbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 k5 K# n G9 C- a+ ?5 c
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! B7 y. B9 ^4 L& vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 K% ^" T% l" {7 E; z; D- R) [positive for the year-do-date, including high yield.
4 Y0 ^! L n4 W4 q0 ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 i R* j' v0 V) k* A- W8 i8 Z
finding financing.
: S, @9 Q; j' N+ t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' A: O" p# @$ D+ D( O! {were subsequently repriced and placed. In the fall, there will be more deals.
# J1 l( K( u' `; k- R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- V1 i* h' }0 j0 I. ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' ^4 c* F1 U* ?going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- H& V5 P' R2 s- W
bankruptcy, they already have debt financing in place.
% R7 G! f" T$ w) S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 X" G: d7 k4 ?* q: ~" y
today.
+ }9 X! g6 T; _+ }0 G Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 @( c$ P7 t, q
emerging markets have no problem with funding. |
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