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发表于 2011-9-17 13:16
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Current situation/ c8 X5 W6 q$ J8 W4 k) |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" W" m* A/ R6 o0 ?) \% Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( ~3 Z# U3 d) m s6 J( ]8 [3 P
impose liquidation values.& _" g' b, r% r7 D* X
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 z2 t9 e/ o A5 U7 a: A) xAugust, we said a credit shutdown was unlikely – we continue to hold that view.
b2 ~. b- u. t% m2 h: D% |" b& F ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' B) S8 {. v5 S' r. @; e7 Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ B- u( Y( Q7 U) V. t& |A look at credit markets# @/ {, [6 I. E. X8 q0 P
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ H/ V2 ~8 |' A! C
September. Non-financial investment grade is the new safe haven.3 i: u$ Q" J; b, J, R. k/ K* O9 @# s
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 g3 o+ ~$ G$ t9 ?# O) r% k
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 I1 _1 J2 ~2 y$ {$ ^! e* ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, \0 P9 K& m6 d0 I. y5 l
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 t2 Y9 V2 A8 Y" J; `CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 K! L# x3 b* A3 fpositive for the year-do-date, including high yield.
, F5 s# W$ A7 B0 w4 U q# I# } Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, {' l x! m# H P
finding financing.6 d6 S! q7 S! f% n8 a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% K4 y D' T; M2 Y3 u: }
were subsequently repriced and placed. In the fall, there will be more deals.6 s+ @4 j( M8 o1 @. g) ]% a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 A3 l3 d1 l. |! D* D9 Sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. ^2 U; E: }9 w# ]* a
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ v Z. C" `$ g8 ?) B4 [+ d2 Fbankruptcy, they already have debt financing in place.* z2 e! U1 K1 E5 K8 W$ E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain g g" a6 c0 i# o
today.
' e; P' L# |) m; J7 D& m2 Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" d% d ^' r3 \/ ^: Q& L
emerging markets have no problem with funding. |
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