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发表于 2011-9-17 13:16
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Current situation
% |. C2 a* L" R2 C* K. L$ C: U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 n/ h" H/ Q* K6 l9 n" W) W" D/ bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, K9 b% H" Q6 b9 ]& l3 ?7 vimpose liquidation values.4 R- ]: G; k' J. i
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ P6 \0 N3 G* |, rAugust, we said a credit shutdown was unlikely – we continue to hold that view.* T) \( q& X0 D3 Z0 Q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* ]* d* W+ F1 ?: J0 T0 E6 u: Dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
( z: g0 M4 {& Y6 @/ N* h2 r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 m1 D* i1 M, X. ^/ G8 ^7 ?! a$ U! `September. Non-financial investment grade is the new safe haven.8 w+ X, }$ a5 J0 ~9 Q( U* D
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 X6 K% P* J/ C. vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 H0 m2 h" C$ K- r% C7 ~& M" pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" a/ Q; S5 c z- E
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" p. I+ d9 ~1 N1 D& I0 fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; r' \, ^8 X, h8 z b' Bpositive for the year-do-date, including high yield.
7 G1 F E7 V, d3 V, q }7 w$ B, _' }! D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. I* }) v' y8 G; }/ Q- X0 m( [finding financing. M. X4 E6 ~7 t3 B. O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. @0 T# A6 O' @: e$ t
were subsequently repriced and placed. In the fall, there will be more deals.
7 s; L; ~, i9 N) C4 l- ^" H+ w Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
V1 Y5 i A. K6 ?% gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ _3 }9 ]2 r0 m! r" \- M1 [5 V0 tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# F( i, E, L3 q* e7 s9 o
bankruptcy, they already have debt financing in place.+ i( k4 \: B1 s4 h i5 h. a' E( c( }
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" d9 c( E. }$ I/ wtoday.
* G. [. l1 a9 V9 u% _; i" E' M& x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in [0 G9 O( J, o6 U
emerging markets have no problem with funding. |
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