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发表于 2011-9-17 13:16
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Current situation
7 }6 R5 F4 ^5 l+ J7 h% k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% C1 }: M/ S; m [6 n" @0 B0 o$ Jas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ k4 y0 e5 }, A7 h4 U
impose liquidation values.& u: g- M B9 _/ ]
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- c3 J; s0 J% m
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ C& L+ [9 X T; t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% j& d% Y& P2 _+ i% a8 y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 v. U S) q" f0 y) v
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A look at credit markets
% m) s% N( V8 S! X, F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: X5 |% x/ V5 v' {September. Non-financial investment grade is the new safe haven.
h4 v( H2 B! z! I- G High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: ^) ?7 w" ?8 B9 d: V, j/ pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 J, E7 r6 o7 c( J8 }billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ V6 X3 ^- \6 G7 s2 M
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" `" v# t3 j, K( d) ~+ }) Z, ?
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; M; D! A: j: ?# @6 b, Q9 tpositive for the year-do-date, including high yield.
+ U# R T" |) Q+ I* ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ @9 H R: ^% K& Yfinding financing.
4 c! @$ f7 w7 W( m% h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ G! s: O/ k% }3 h% h! G
were subsequently repriced and placed. In the fall, there will be more deals.) R) j/ }& p6 _$ K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 K# m" H# T+ y0 R) ~. S# a* i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 a% H1 L: e8 i2 h" `( j6 X# t/ O# agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 S$ M5 V3 v/ \3 V
bankruptcy, they already have debt financing in place.
: O6 J& J0 s: X( E: o s0 d European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ x% {0 Q' p, z8 {5 _" Itoday.' [2 h, J5 v# ~( n/ |
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ x0 |# O0 |( y: m5 u3 Xemerging markets have no problem with funding. |
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