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发表于 2011-9-17 13:16
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Current situation
& N% q5 c1 S- `) B& ~. ?5 E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: e2 y$ c+ K5 f; |6 Q$ f' das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 X" L+ _1 Y6 }impose liquidation values.
6 @% Z/ [ C( d1 o) f# j) ?* ^ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ G( z; M) \0 Z7 u p% B
August, we said a credit shutdown was unlikely – we continue to hold that view.. q- t I5 | w
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 b( r6 j8 D) V' ?2 Uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 k0 D& f3 }" r$ \. @
8 b) X. q$ |; {" m4 n+ R2 f+ u8 L
A look at credit markets
) u( o& r, |4 n3 z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 d3 v& @" @, y
September. Non-financial investment grade is the new safe haven.
( { N4 G' G3 z5 ^8 o2 L' E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 e) S" e9 u/ {0 z- S8 {$ Gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: A! r8 t3 ^( z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' w4 M) j) u* b% y. W2 Z/ \4 q% i7 {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 [0 X' ?8 y P( qCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* T" H. B0 S+ i2 ]( m! n" v W% Epositive for the year-do-date, including high yield.& }% F% {! D' ]$ W7 I n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ D3 N) g) ]0 l7 M
finding financing.7 n" _) _7 L3 ~' y# j; @! E0 X) B3 h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" W2 ^2 g$ N3 g0 I1 U; ewere subsequently repriced and placed. In the fall, there will be more deals.' q0 D& S# R2 m: U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: R5 s! P9 p$ ~: {- l4 Cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' x' v4 s# b: H0 h8 c4 _& }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 |$ Q7 M* m3 X( j/ G' Q. N* f0 |bankruptcy, they already have debt financing in place.
: E) E, I$ W9 Q2 n9 A3 O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 P$ l. |! k' z- B9 } A# s @today.5 O! d2 Q# W7 P2 m8 v7 o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& u) b( g# }% z% B7 J$ D: Demerging markets have no problem with funding. |
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