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发表于 2011-9-17 13:16
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Current situation
, V# a! ?0 g d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: Z- C+ r/ ~! E9 Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' r X7 b1 f3 q
impose liquidation values." [8 ~3 C! |: S0 L2 I% o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- _1 W+ G2 v1 Y$ RAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ y% s$ \; Z/ K8 e5 y! N+ x The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# V4 D9 p. _( j5 A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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% A5 G8 s) s5 {. Y* w) eA look at credit markets
% r" ~4 }$ W# E Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ H# \. T) b* ^% x" |# P6 q3 T! T
September. Non-financial investment grade is the new safe haven.9 q5 O. V, T2 `, S" U8 J
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# d% V9 t4 @; b- P& z J
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 O* J8 @) O; u; P" y. Y! D5 v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 ^( p+ S$ l1 Q$ q0 k3 X r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! r3 x8 ]( V. d7 W$ @/ aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ ^6 @/ K5 W2 hpositive for the year-do-date, including high yield.
! D6 d6 R5 s D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& [# J% c1 ?3 k) [$ S2 q+ jfinding financing.
1 ?( O6 N+ J5 c" ~7 V6 Z! J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 V) t: S3 e% Y$ o( `6 t
were subsequently repriced and placed. In the fall, there will be more deals.& E4 P, `+ R- W$ D' T! C3 ?$ e
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" D# c3 @, L5 pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) r h0 [, ?7 t# U
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for [' w( ^, F. H
bankruptcy, they already have debt financing in place.
1 Q1 v% T1 [/ W7 @" ^8 @$ l European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 U( Y8 ]4 S" v% Z
today.
3 E# w; s% R/ R, e+ C1 `$ V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 u! H8 n+ s- G) i3 A7 B6 `
emerging markets have no problem with funding. |
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