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发表于 2011-9-17 13:16
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Current situation. C$ f& o; p( i/ B8 J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% V& Q2 z* X1 B, ?2 G: H, u% L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 y( U* G/ S1 Q+ m. q9 S/ j! fimpose liquidation values.
( B1 Z: C" J6 f" `- T O- O5 x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 k5 c0 L( f0 ?) a6 M
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ c. d- h* U! i9 f9 V [- }# y- K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) m( Y# S. A4 r5 t0 ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 K" s9 X( H2 \
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A look at credit markets
0 D2 Q6 A: |( |- b9 r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* K) E" N2 D8 P( U
September. Non-financial investment grade is the new safe haven.
% N2 d" ^* _: l" M5 {- O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% O% x9 m1 e) Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, M& b5 L! U: T2 M( Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 H( ?, ?8 H4 g K3 o: S8 w
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- E8 T, r& f6 N3 f! V
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' [3 ?# \% j2 K* X6 Hpositive for the year-do-date, including high yield.' _& M& V+ ?! C& B
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 [6 a8 C5 k f- C v$ [finding financing.9 h3 @" N( P! t% i
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ A2 B* S. U! q' s# E: y* K4 Jwere subsequently repriced and placed. In the fall, there will be more deals.' ?( M6 H4 e2 d; n5 s9 f/ ?1 |/ l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 B! x1 p7 G. F; m5 C0 Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 k; F0 }$ U8 M, Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 t8 Y8 r7 j2 e# s3 o
bankruptcy, they already have debt financing in place.
, |. [, d+ R7 ?* F% j European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# }9 p3 p& g/ j' `# c& o5 `8 I$ i
emerging markets have no problem with funding. |
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