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发表于 2011-9-17 13:16
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Current situation. t/ r8 K$ I7 J3 b& _' g7 ]. j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" H$ X- m Z4 ^2 Z( e4 U) Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' r+ p j, b0 e N6 A
impose liquidation values.
# F: ~- I; h4 r) s$ Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 {+ r& j* b' |" y
August, we said a credit shutdown was unlikely – we continue to hold that view.
U; M4 g# u/ j; S9 Q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 F3 f; y1 S, @+ M' t1 Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets, X6 R5 Q$ v7 s. d; o' p
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" ~* E7 g# g$ v4 |1 b2 K9 gSeptember. Non-financial investment grade is the new safe haven.
2 E+ @2 n' F9 R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& C) j2 W6 O9 \9 E
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 X- p! e$ X+ M% `3 x% p' b7 j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: g9 U* }1 ?: W2 N- Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( J3 n- Y" {: w) yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 h: ~5 `3 b9 P/ Q+ w) _positive for the year-do-date, including high yield.% K( C& ^7 W! H9 n5 U% ^" u K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 N* W% d5 {2 S8 _. Xfinding financing.
* b8 n" f+ G" U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
I+ x+ S8 c7 z) y" w2 {# Uwere subsequently repriced and placed. In the fall, there will be more deals.
( \ C$ Z! S$ Y0 k7 r" f Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ c7 O/ ?( b1 Y8 o$ ~6 N, S0 d- P
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were w4 \- L: y, p- f3 {
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 _% B- r+ I3 ?, X0 `
bankruptcy, they already have debt financing in place.
5 N7 Q! b& F$ H/ S$ E; P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- [: T1 n; Y6 s3 N% ]# [today.# w. S5 R1 C7 m+ I7 _. F# k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ a0 X+ k0 d% I. W' e2 W8 i# z
emerging markets have no problem with funding. |
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