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发表于 2011-9-17 13:16
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Current situation# L v# U$ k7 E* Q" k2 F
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 O3 Y( Z1 j q5 J0 ~; ^0 M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& I1 g1 }& L6 p& Q, iimpose liquidation values.8 D% q- ]% y1 j9 R4 c- a9 ^
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 J' j$ X7 }: Z. E# TAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ o3 x7 r, v- R- t9 l The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ q* m/ f4 g8 Z+ G8 n0 n6 C* E
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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* Z$ G0 F0 k7 J5 [6 f: [- h# |A look at credit markets: g; U( L" p: n/ O& J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! C+ M" L) t3 v5 s. C7 z j
September. Non-financial investment grade is the new safe haven.
6 y; k6 Q' \0 p& U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! ?. f' u3 b' P* G& I" y& L' u. R, dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ D, \; n9 e7 Z- }+ w$ d
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 H6 O8 Y$ F1 ?6 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade b% d' t' G9 J$ l) M; `7 _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ a- b7 i* a3 u2 P7 }# m8 _0 g
positive for the year-do-date, including high yield.
! C/ {7 l, _+ m. D9 g6 L; _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* i2 B! @4 v- B' g* p
finding financing.
9 I) I4 S! f! C/ r2 @% Z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 K8 E$ x9 s) @( t5 V$ M8 o
were subsequently repriced and placed. In the fall, there will be more deals. W$ L! f& ]# @! f' y8 v+ s
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) F, U/ ?' f: z* J0 R, R
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% _* w5 K# p7 d ?" B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ ^ S+ `( d& X. Abankruptcy, they already have debt financing in place. o! s8 e8 f- M3 k! L; C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& b' }7 I1 R1 w; C: ^2 H; Qtoday.0 b4 _+ u5 X9 i" }/ E6 y5 E
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) u r9 I$ i( r5 b& I5 g. w* ?+ Nemerging markets have no problem with funding. |
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