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发表于 2011-9-17 13:16
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Current situation$ b& k( _) B( l! C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- C; l' a; R6 c. uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, Z( q" {+ [, b* U5 n1 Fimpose liquidation values.& @7 X+ M6 R+ S# {- v K) k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 v% K6 ]6 U1 o: S* _: I MAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ E( D' P$ Y7 w* O* p+ n# F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 _3 K) v$ Z8 d2 V" {6 ?7 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* H2 z* x+ ~' G3 a- f* f' v
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A look at credit markets
$ Y# c9 ~ N' o8 |, b Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: V9 ^1 S4 @8 u: U
September. Non-financial investment grade is the new safe haven." ?$ F+ G$ F3 t% l% B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ ?5 c/ N% i" ~! J% R9 g: R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: r+ \, E- D% ?2 {% c( |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 U {8 e; k, k1 baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& M* m7 f! k5 f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* }4 m! M' D* p5 tpositive for the year-do-date, including high yield.
* m( a2 w: U- o* \- w1 ?, y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 v% B) t0 g" @# C$ Q
finding financing.
x6 m. k8 ^# k3 F4 Q Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 o0 w+ |! ?" C0 N+ @& v+ l2 `1 V2 X
were subsequently repriced and placed. In the fall, there will be more deals.; n. y) q. F8 D; X, H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( Y8 {6 ?/ O8 a) u2 |5 _0 }is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 N" A( I p" x( x ?; i
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ o, s$ \ [6 n+ h+ M" vbankruptcy, they already have debt financing in place.3 {+ D4 T2 |2 x F
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 C) i/ n# r% r* h. L/ h
today.
& r0 Y G4 d5 f2 }1 ~- M3 N' I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( K& b# Z/ P$ t7 h- L- R: \$ c' p
emerging markets have no problem with funding. |
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