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发表于 2011-9-17 13:16
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Current situation
8 }0 {+ S# Q2 H1 B0 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' @3 X9 x8 q1 k) A' t3 F
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 e" e2 k2 f" _impose liquidation values.+ P7 C; D+ T6 M5 s4 N4 A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* F" V) m" _$ o5 k) M' U9 ]8 M! w* s4 OAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ s' R3 A* j& _' k5 @( L, U, @
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. A1 T4 {; b! B- r: a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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8 R% e+ `7 t* {; E5 x# NA look at credit markets
* W5 ? w% e$ P* w2 Q( h6 r# [ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* Z3 h) n9 v6 a$ I' W2 u) hSeptember. Non-financial investment grade is the new safe haven.
2 v% m; F$ H/ g+ o% X' r! @, ] High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: F+ h! D3 a. \5 l" V7 T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; w0 a1 b& {$ q. B3 y- gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
^+ M6 O) f3 A1 l& Paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 @, s7 T- R! m. X! sCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 Z: j: P& m- f7 D! _% G
positive for the year-do-date, including high yield.
: s7 D+ T2 x" C7 e9 v Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( ?/ p- l) H, `5 ?1 O* lfinding financing.
- q, P6 [0 O6 Q& J2 @3 S0 P Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 s) B" R4 s- O
were subsequently repriced and placed. In the fall, there will be more deals./ _- J$ @3 L, d) p R2 B
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! k# M" f8 K/ y" E. ], Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ j6 t( M+ S, k, B/ |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! z- `8 x9 `) ~8 j( g# e
bankruptcy, they already have debt financing in place.
0 O8 b7 y( V' S2 u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 X+ B( M1 g: G2 btoday.
" D: g# [( E* |% M9 n D/ {. ^2 i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' r5 ]& Q$ a" demerging markets have no problem with funding. |
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