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发表于 2011-9-17 13:16
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Current situation% {) }* f: [6 b7 `3 q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 @% k+ {2 J+ T# ?as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( a/ s. Z! v0 {7 |impose liquidation values.' @$ H, l9 y0 Q: s) P+ t2 {+ s
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' Z7 j* d8 ^. i+ q
August, we said a credit shutdown was unlikely – we continue to hold that view.
; z. ]$ S# n" M9 ^ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 Q) X: x+ w7 e, f( d' i+ e% I
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
; ?, }' E! [9 ^: a/ m$ u/ C+ s* }
A look at credit markets
! G' s* p% N: z1 ~' E, i% m* M Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# M% t" z6 t- M/ Z- SSeptember. Non-financial investment grade is the new safe haven.' ?6 G2 l6 w+ w
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% I" F6 o7 r$ Z1 hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 D0 U5 `5 e7 ^ [2 @) D4 s+ d
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* b# p- F9 l% _9 s7 e, T% [0 @* Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ M. @" V' Q4 E$ s4 c ?) ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! ~* R" U- d, O {/ n& Npositive for the year-do-date, including high yield.
/ I& k* o3 |9 w+ G; A% M" ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. F' h9 @+ _. P$ j5 S5 e3 C' P& |finding financing.- V8 N2 s3 T9 H- F$ e/ a( o
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 }9 [5 I! H/ e+ P) z- _/ b
were subsequently repriced and placed. In the fall, there will be more deals.: g1 Y! b6 `! }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ e$ _/ ]5 @1 N9 cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 ]) E7 v7 J' X5 j" b( m" Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" v8 t& y# d; S
bankruptcy, they already have debt financing in place.
v( w& S' T4 V" @7 }$ H: N European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. ?4 I5 {: G' {$ Z
today.) c. L$ M( ~* y& f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in C+ T+ F/ l" z6 \* o2 P# u
emerging markets have no problem with funding. |
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