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发表于 2011-9-17 13:16
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Current situation
) K; F1 a, n0 j# D# z G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- R4 w% H. W, a% oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* ?& a, M% f- t1 \impose liquidation values.! `& L( Z2 f% C$ x/ t( p. W( |$ ^
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 [2 ]8 Y- @% [$ dAugust, we said a credit shutdown was unlikely – we continue to hold that view.* \ P# \- n# q" x
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' k! r* \8 D/ T0 U4 I8 C- M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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7 v, y. B8 l6 [5 W2 H- UA look at credit markets1 t' C' X6 y& h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) j) `$ N# i5 |7 g5 U/ ZSeptember. Non-financial investment grade is the new safe haven.! Z- G4 g/ {; G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& U% n4 S/ {0 Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 h6 `; ~$ k0 K. w/ @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. Y. ?/ \+ M2 P5 v( D/ u! Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- j4 a6 X. L9 D$ m7 V9 d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' h' l# B2 T( N4 r; s0 ~
positive for the year-do-date, including high yield.
2 k2 J3 ~( n: S2 {4 O: Y( i Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 ]% V3 k' w7 T0 ^4 a" a, dfinding financing.) C9 ?5 G8 Z4 R( }1 V+ e5 j. n/ n0 _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% c/ o1 d! P6 t. u9 ` O7 e
were subsequently repriced and placed. In the fall, there will be more deals.# x! H2 v7 R1 P7 ^: J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# I- X. @9 ?7 N% m8 Z, I% j! R% ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 D5 S( V8 C& R, ]! c& Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: W z$ M! J& q. z3 R' P; t
bankruptcy, they already have debt financing in place.
( w* h( T! D5 n$ e- K( v% i) P; M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! F9 @8 ]$ R0 x* v( Q, T+ Z6 ~
today.
5 _% u" `6 @+ u. Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 u' Y# l- Z, Y9 S! Zemerging markets have no problem with funding. |
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