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发表于 2011-9-17 13:16
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Current situation
3 N/ L' X8 A7 A4 b7 ^. A" v) ?& W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 d: _( Q5 ?; a7 {1 F- ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ F" q! {2 [# a6 B% B+ h* K* oimpose liquidation values.
" o' i' r4 b, S# h6 a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 u1 q6 l) l* \8 g/ W
August, we said a credit shutdown was unlikely – we continue to hold that view.$ _; O) t7 G$ N; P2 ^
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( n" B4 {: g& w2 Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. I- t& w/ ^0 [. d: d0 ?
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A look at credit markets( u. R5 h7 m1 ]2 H+ S. K2 ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
O9 V( l- N& o4 t* X4 hSeptember. Non-financial investment grade is the new safe haven.( |/ O" T( Q. O5 g2 }; S9 v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, p/ @ e; Q8 N- `then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: v1 V9 Y" h3 U$ S2 ^$ W2 m& ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; |& q' ~4 M) l: c) B5 }& eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. N9 I0 ^' D; X% V
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 ~6 E5 t( v9 q9 B+ ypositive for the year-do-date, including high yield.
2 a" a! U3 w4 z! Z$ e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- g% Y; F% {1 F5 e3 @8 T
finding financing.
: O; f: m% h1 f2 X7 i) E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ Y6 P2 }; q. ?) r! f/ _
were subsequently repriced and placed. In the fall, there will be more deals.
; C2 H6 m) K: i. e2 d" } Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 K* h% t2 N' r; X( Z& ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; ~/ q9 n0 ~8 d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) P1 y9 N4 y$ g, a: z$ }
bankruptcy, they already have debt financing in place.. [. w: Z4 J' R2 N% ?
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 p9 X* w- c8 J* \% s, x5 C- C' Stoday.) S" \: C( }, N8 {+ k H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- n" D0 P3 x4 j- M& d P" |emerging markets have no problem with funding. |
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