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发表于 2011-9-17 13:16
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Current situation
" k( M% E# l8 x) N& U; L The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 U0 l9 g+ e |5 E
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 S8 c; F' W! C+ C6 Jimpose liquidation values.- p' f( p/ ~' e) {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 T6 H4 }5 _9 D" k3 z; y5 J* ]
August, we said a credit shutdown was unlikely – we continue to hold that view." G* X0 W% l8 c" ^
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' N7 x0 T' F% ]5 w8 a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 b; Y' R9 J+ z0 \4 k
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A look at credit markets
4 l6 U) J* N6 a5 s8 [8 Y. m W Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# i; ~, z) w6 l4 ]% D/ S
September. Non-financial investment grade is the new safe haven.9 N+ H& @0 e; A9 D% l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" Z# \; A# v ^/ M9 R9 \7 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" b' e0 s/ s, h( E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, J7 b+ B% G' J! s2 kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' ^/ Z. j9 G! Y+ u! Q, t ZCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 L9 U4 l/ G+ K+ z" L$ V
positive for the year-do-date, including high yield.! s+ Q& O0 l0 Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* s: A# `0 \: ?- k
finding financing.
7 b4 L# H! e/ P2 t9 R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) |- @* z9 f8 `' g* Hwere subsequently repriced and placed. In the fall, there will be more deals.
$ z7 l7 b1 @1 O" a Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 Y& h8 o/ c4 L! [$ l1 v: [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- N; I. ? @5 f& S% r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 W( a: b$ s8 F O
bankruptcy, they already have debt financing in place.' t2 ^, i9 |& k. A4 c) I% u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) \ s) g" f% A+ R/ y6 p
today.5 }1 j- Y _1 X0 r) b! V4 e$ w# O' A
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ Z F* W2 ^# P5 O- gemerging markets have no problem with funding. |
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