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发表于 2011-9-17 13:16
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Current situation6 U9 a7 u% o+ {, m& i
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: Q* X% J2 D; ^: Y3 w: x3 k- m% Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 W1 p4 z) e7 i1 h+ p
impose liquidation values.
% P( ~0 J3 ]/ g+ e In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! t, ?- O8 D- d9 g0 j) ^
August, we said a credit shutdown was unlikely – we continue to hold that view.
1 m a$ p- t+ j! O B: n The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 N9 s' y1 j7 P( L* L) q/ P: U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets" m7 `/ l4 d m+ {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ o$ @ I. @8 s0 M* `September. Non-financial investment grade is the new safe haven.0 N# T7 E/ ]( ^
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 A2 f; O" N& n+ S* U; W' y6 N, ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% g* N" H9 L1 v2 m/ ^% i
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! q3 R5 G" ~ G* L$ i7 J
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 j. v$ ^1 \' z" t7 M* u4 h/ H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ Q; L& W6 f1 q* F8 M
positive for the year-do-date, including high yield.
5 q; W z( y6 v7 ?5 T6 v Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% b) |" S7 t8 s5 |" P5 m5 J3 P
finding financing.
5 b5 Q; \* _2 G5 R% [ X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 w2 |: J/ L" ^were subsequently repriced and placed. In the fall, there will be more deals.7 I6 U0 \6 z% ]8 i5 I& `
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 B$ H/ [4 t( G8 f* C" x8 Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* s) ^# _, u, ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 J# e4 K7 U. f& B- w @' `7 rbankruptcy, they already have debt financing in place.
7 Y/ U4 ]& w( D+ e European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 n k: [9 z" Q0 b+ v; F2 z6 @& j5 Otoday.) G, R; @' i$ s5 U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 q/ e) w* g0 d6 C+ n9 m6 N4 y) a4 x
emerging markets have no problem with funding. |
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