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发表于 2011-9-17 13:16
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Current situation$ f3 \' ]4 ]. }) u; P* }) K; a& \
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ |3 P) z9 E5 T p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. }" ?( T- c% h) Bimpose liquidation values.& A6 _$ X. k% a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% C( v% c. e" y( D Q
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 Y& `, x$ f; Z; ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: M5 N) G4 Z$ I) m8 L. |5 \scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% P) W5 E1 B) w& [
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A look at credit markets
/ f, R2 }( C- Y! d4 w Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 ~+ b$ d% y; H) }0 q. \) }4 t3 e
September. Non-financial investment grade is the new safe haven.
$ @. q' Y3 Y# @0 S9 w% z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- |, u6 |8 [5 h; d: W) Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 K; {6 Y1 O8 X/ f
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! O, Q+ K/ N- J% d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 I1 d. i; N* w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. j% U7 ?+ ~8 F5 ~& x; S( i
positive for the year-do-date, including high yield.
5 T+ ]6 c6 h1 y% j2 r6 \ o+ N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% b( }- O, Q# K" R9 z' c
finding financing.$ M! Y6 m' M; \1 t; q2 }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they M9 m9 i6 S. {- [2 f* U9 N& r* d
were subsequently repriced and placed. In the fall, there will be more deals.1 X8 j& ]% e; m( d3 q1 C
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 ^$ [1 a+ ~( Q& fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 H4 j! O2 _4 d: W# K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; Q, B- H4 n) K8 ?3 [
bankruptcy, they already have debt financing in place.' a- V+ A) v. A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. A) E i9 h- mtoday.
, M& U( E' R) N' \. z/ _ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ y9 c2 }. M. O& w# d. S
emerging markets have no problem with funding. |
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