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发表于 2011-9-17 13:16
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Current situation
0 J w7 h+ |6 g4 N- H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- z3 h+ Y- x3 p, {* las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 t) H9 p' x F8 ^
impose liquidation values.5 [, I: v+ {& C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! ~9 a* i3 }! Q. p2 Y% O+ m
August, we said a credit shutdown was unlikely – we continue to hold that view.
) a! y. @: X# k% d& {+ i s+ v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 Q4 V* _- u4 qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets/ B) \) j& o$ n$ {% @! Z+ J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: V7 n. g% T% N/ ^
September. Non-financial investment grade is the new safe haven.
) ^4 D& y/ Y$ n) h% R. Y+ c8 \, E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ ~( Z; {+ W# X, Sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 G7 Q7 |& d) G- [6 M8 Nbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. f" _; B; D3 N5 v: k; }' H
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" Q: _1 f8 Y$ M C/ cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% h$ b; Z2 y! T; \' vpositive for the year-do-date, including high yield.
/ ]+ v7 Z- R1 f' h4 p* F- r+ C Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 {. L1 n( t* f6 F a+ I
finding financing.
r. i( F9 Q1 \5 E3 N6 s# X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! M. v! F1 G1 l! W! Swere subsequently repriced and placed. In the fall, there will be more deals.
5 `2 s: V' F3 k( ~. i Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ V+ I) y- C3 V0 j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) D+ E6 n! v! ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 v5 }4 M1 V: ?7 I# gbankruptcy, they already have debt financing in place.' |; C4 R( @& [( {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# H8 L; B2 r2 ?3 V" h
today., f; x$ E9 e' h6 ^9 l
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 k/ S6 S+ J; N0 Q: P1 I6 R/ }& Oemerging markets have no problem with funding. |
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