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发表于 2011-9-17 13:16
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Current situation4 B& x# t* ] F F
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. O- b) `/ E( \! R
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 x0 j4 O$ ^% F1 K; r5 [impose liquidation values.
9 M1 k/ F: ^; ]6 F/ c0 X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 { H7 }+ l3 L' S; |; {& ~- X8 PAugust, we said a credit shutdown was unlikely – we continue to hold that view.8 J7 H/ a/ p' z! m4 x) o. T' ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' W8 x- a+ [+ n; x' y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) o8 Q4 p( ^) K d
+ e( g F' {) T( }" p' i% w; jA look at credit markets
' Q% z( N' k% C. J u0 z+ R" X: j6 \) ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 N! f7 x+ U& I& `* aSeptember. Non-financial investment grade is the new safe haven.
$ n% \+ M' M* {' z: ^3 t# i High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ `3 o, F. g) E1 A3 L# w, ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 L$ V4 s& E+ A7 S: u+ B
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 v2 `( j5 Z" t8 T1 Z7 yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; I4 p, q: I3 r% ^ U) d* P. x6 T
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 | V4 \9 n6 C3 l% o7 E' H
positive for the year-do-date, including high yield.
! F6 W4 J) r. i' `; \: k5 k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' y; [9 m, b0 c# G7 A0 C+ \finding financing.6 L4 _8 s7 j7 ~
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& J5 p' f* T3 z k9 S/ M6 |
were subsequently repriced and placed. In the fall, there will be more deals.
2 L+ G! ]2 a2 b% m$ o- } Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 A7 y9 X7 A1 M/ {. w- @! p
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ w+ c% _' f& U1 T# bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" ?3 k- j z# E+ T, p" obankruptcy, they already have debt financing in place.
4 E4 z8 f. v' a, R European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain c2 a! {5 A; Z4 J
today.2 S( d' s9 o P$ O
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* h' Z' H7 J# G6 u6 z7 Femerging markets have no problem with funding. |
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