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发表于 2011-9-17 13:16
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Current situation
: ^' q( o7 \, @3 S# h9 B$ J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* ]2 U/ I. P5 R
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 |0 W8 _/ u5 I; z: _
impose liquidation values.
2 Y9 U3 V3 a- D: | t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% o8 y# v! v7 y- ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.' E0 } d9 q1 o+ T. C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ V2 z0 s1 T- ?$ F5 H Dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
. l, H7 W. _. Q0 S$ ~" Y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% f, ]% K3 U3 ]
September. Non-financial investment grade is the new safe haven.6 P( i# @. f1 Q$ Z0 l3 U- k7 N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 Q' w% u* c8 }# R& E t" w' U& Y5 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ m1 R ~/ z2 H7 V- X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, `. P4 U% c& u, K0 W, D/ J' U6 A
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' f+ F$ K4 U6 P/ w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 g2 B6 O+ H0 B6 [7 ^. x. t
positive for the year-do-date, including high yield.. M( ~7 w0 s+ o8 i& m! U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% W! [( ]3 M V( Z
finding financing.3 Y( ?- b/ L% t1 |( n
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 ?( J, M( W2 T+ B1 b1 n: X
were subsequently repriced and placed. In the fall, there will be more deals., Z. I& u W0 T7 ? n) P6 V
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 V; Y* M0 {8 H# P( G5 tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 [6 Y# Q0 }% a- [
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! x2 X- X1 _; n5 v. @bankruptcy, they already have debt financing in place.
+ l1 w0 m4 Y" `0 f European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! i9 v X0 v4 K" t" J: Y3 {today.
+ K" Y5 F# ^/ H Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 |) u; C2 v( x4 c' Memerging markets have no problem with funding. |
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