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发表于 2011-9-17 13:16
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Current situation
3 _2 b1 E1 g4 }1 v, @! o' R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. F' N+ E$ l& E) q: }
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' s/ X+ W6 q5 n% L% J
impose liquidation values.. J" X4 w5 g( C' [
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# W" _* W: p7 P6 gAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 I% \3 w8 O7 H! _5 n* M$ U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. d( M2 b! G6 K0 a" lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 R: n; k5 t6 N% T& S2 [2 w
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A look at credit markets
0 L6 e) D! o6 K! b) Y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# {. @' S x4 W3 q1 I2 cSeptember. Non-financial investment grade is the new safe haven.
$ k/ u- j0 z. F: e" Y7 C0 R5 S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) {# r, c/ `/ q9 V) ]7 B8 p- B: R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: z2 j5 ?. n7 ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; J1 ~+ p0 r( u& W3 H
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 V2 R+ u% h& b4 {! C0 m% x/ y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: Q$ w7 Y. o- q' F+ d
positive for the year-do-date, including high yield.! |5 {" `- T7 Y5 h; y3 \5 ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, c5 M( g0 A$ O: _! d; I& g0 N, X
finding financing.
9 E3 x. Z% ?8 P. R1 i6 ~. S Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" d: c* h9 c w" I7 Z0 F
were subsequently repriced and placed. In the fall, there will be more deals.
+ ^0 b1 H9 D3 a6 l# p Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) |4 s# @$ ^4 R$ ~! z' Q! Ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! K @0 J/ j$ S- i5 d9 B7 C( ?going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 |1 G, I7 o% g4 b8 f
bankruptcy, they already have debt financing in place." _/ b7 l V7 `9 v9 }6 s
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- R2 q# f5 t2 ~5 i$ o% {today.5 g2 _( h' X) f! G+ ^ X
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
Q& |' U1 g$ u, Nemerging markets have no problem with funding. |
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