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发表于 2011-9-17 13:16
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Current situation
; o8 ^ @$ V( _. }% X# W! a' Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, K! M- E+ f6 ?' b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 \: g" Z' ~. [9 z5 I/ D
impose liquidation values.: k0 R0 w& j# j( ?/ g! T' N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' l9 ~! e7 l+ J
August, we said a credit shutdown was unlikely – we continue to hold that view.
( W1 W' N1 }0 o# @2 }! o( b The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 X+ g2 L& a7 |& p; Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
. z2 [ k! F, o& L& t9 {, m0 P Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, l P2 e& E. o: v( w
September. Non-financial investment grade is the new safe haven.; p! D' `' _8 s+ |: I9 u! C7 J
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: B+ s+ O% K3 K) Xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' ^' `" H+ A) u% q1 W5 ?9 h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 h, v; `) _2 L n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! R% ~4 Z6 E2 I5 Z XCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# k) M! q7 P- ]' B
positive for the year-do-date, including high yield.
& ^& N$ K7 G3 R' Z6 W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( n; }0 G& C3 Y& d' i
finding financing.0 N. J0 _* |" \" a4 E& q4 j+ {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ r, v4 X7 d% l Ywere subsequently repriced and placed. In the fall, there will be more deals.
7 o$ c) f# {. h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# @2 H6 m# E m* jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 k0 M2 h3 s& C4 O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- F1 b4 a. t- l/ b3 E6 P
bankruptcy, they already have debt financing in place.
* C8 W% x* T' q% [0 @ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 C4 G1 `+ p' R* D+ _# V, ?8 Dtoday.
1 i, w7 R- v* z% V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 J+ P( c6 \6 m4 @; W
emerging markets have no problem with funding. |
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