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发表于 2011-9-17 13:16
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Current situation
3 e2 _) m! H% q( f) z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% f! a0 |) D8 D2 }5 ?) |0 {7 Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! K q! W, p2 C9 I0 u
impose liquidation values.
$ {% s1 e6 @, Q" c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; P8 C3 ^: H2 mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* W6 c4 T& Z* Z6 @% l3 I* c' q& ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 X. \, s6 g8 R1 ^7 ]8 j; j! n
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: V2 H3 |) R% O) {1 i( C7 x, t5 W
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A look at credit markets3 U4 o. X- Y' l& J& J0 O; |
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; v" o; K1 j7 w" _3 q+ q3 \5 @
September. Non-financial investment grade is the new safe haven.
, e m% B% V& ?, K/ K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) g& p. n4 g0 y0 o: l5 }1 A0 T p% L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 Z$ |2 O" R/ S2 e, H, ?# R8 S. N" wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 Z$ |' R" l! x% O5 e8 q4 i& Raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- f2 M, T! e5 t! o# h) [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ ]; R- z0 y/ q+ V6 Y
positive for the year-do-date, including high yield.
+ o" A: I5 q+ w/ A# q4 o! } Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" E% v- j' a7 d* }; k9 v
finding financing.- r% i' W) h9 H7 c& [' Y$ N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& I) D$ O- J- owere subsequently repriced and placed. In the fall, there will be more deals.( O! R0 i, Z, c7 d$ L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ h& Y4 j$ @: h% Z7 A6 Q5 Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ i, v* T" Z; r( E
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 }7 x( p$ z" B8 ^& @" p9 ebankruptcy, they already have debt financing in place.
' _8 ^. Q0 t; ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) E! ], @* ?# u* Z5 ]/ `% J5 \' U% O
today./ m' ]% Z1 k7 E' b4 B8 f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
u" J- B9 b3 Jemerging markets have no problem with funding. |
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