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发表于 2011-9-17 13:16
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Current situation
( J, ?6 U. e! X: s- } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 q7 b8 ], R* `! x- |8 Uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: f7 d( d3 J3 c+ A
impose liquidation values." _" v Y2 }0 X, }$ M8 W
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 Z$ h$ B2 a' v* y$ ^
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 `3 ~1 V& q* ~% d The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 `1 u$ I* ~, f* rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 M7 N. r3 _$ v6 \
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A look at credit markets. K0 ~1 w3 S" \3 o% h6 u" I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 W( @5 V( S6 l) N7 K
September. Non-financial investment grade is the new safe haven.8 m2 n, ?1 ]$ o) h* |
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 ^, d: {; V3 e& u. R+ ?4 `( i9 p9 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. h3 ?7 O! Z7 O+ {& W; R/ G6 M9 C, Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; J2 g# p1 l; ^/ Z* u; S& ^) baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) W3 s; ^" A, F' f) W% BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- }1 n1 ], q" L4 j. C9 K$ jpositive for the year-do-date, including high yield.
6 A2 K8 {/ I6 H/ E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 O0 g9 V& [! I8 C( v
finding financing.( e7 j6 g. _* q! G1 ~2 u/ `/ Z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! ~, i) Y$ @+ U k
were subsequently repriced and placed. In the fall, there will be more deals.% Y. _: t' ~" s! g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 i6 }* x+ G, I: k* [
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: z: }% M3 L8 f7 ~
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( x- x" @/ J- W3 w4 p8 W g
bankruptcy, they already have debt financing in place.* F: B3 @6 u" R$ V
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 |# P: [. [# j( @$ F7 M
today.
$ w/ B5 J9 X; q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 t5 p4 Q' _" _
emerging markets have no problem with funding. |
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