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发表于 2011-9-17 13:16
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Current situation
9 z1 @7 k2 E' @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ H4 Y: W N' U
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 G* ]: I8 `+ X4 }: Q' c4 v+ Z$ k8 zimpose liquidation values.
; o( S* M. o" ^- {/ u1 ?$ H3 B In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- n! Y: B/ y- u' l/ m$ r" L8 qAugust, we said a credit shutdown was unlikely – we continue to hold that view., [4 |8 T# j. t4 _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) A& t% A8 n( H Z8 P' _% d7 _, f7 m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ U+ ?2 K7 q `2 g) o
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A look at credit markets
+ k* P: B y1 G) L" p Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- g4 S' g8 l- _5 N
September. Non-financial investment grade is the new safe haven.
* J6 D; [7 ~, O' @8 H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% E( j0 ^1 c7 t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 r+ U. ?8 h5 Y4 e% J8 c' q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% |, v, }7 N# x- q" I, s$ O" W
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ V' |( m7 `% D6 z& s* v8 D; p
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 I4 Y# V: d7 z0 X7 V4 Vpositive for the year-do-date, including high yield.6 u% S0 u! m- z n5 g0 J5 g/ U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. G4 h; S$ j+ [5 U! cfinding financing.
6 i# D. h. s1 k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 R9 `: \; W$ o; P4 y' }were subsequently repriced and placed. In the fall, there will be more deals.5 l {. J# C+ ~& p" O: m
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( o" V' m/ j- o/ K( s z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 j+ d$ m: R }: J0 s7 ]1 Y* I! j2 P7 \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for s+ P. }/ \, { N
bankruptcy, they already have debt financing in place.
9 F$ K) t5 w& E/ ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. T8 w: r" ~& O& Remerging markets have no problem with funding. |
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