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发表于 2011-9-17 13:16
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Current situation$ P& m* U) N4 O9 F& D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 X5 \6 h2 a+ r) s: v3 F
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: J5 _# d1 @# Q; o
impose liquidation values.3 N# h$ ^7 o( m* ^0 n
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In j# T9 o5 U- d7 f6 e; L( t4 C; w
August, we said a credit shutdown was unlikely – we continue to hold that view.
9 i% S: _7 X( ?7 W U* d The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ V _ D$ z0 M7 Dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets+ `1 r( H u0 F& O! M1 f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* [% g0 @7 @: J+ l
September. Non-financial investment grade is the new safe haven.! C( @0 F0 J5 s0 J/ ~" T# W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( k6 `( v/ ^0 Z' Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 c- g3 J R( E4 d% h/ ^" Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 a- t o) r) Q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: K# ~$ ^$ M5 }" Y! e9 U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; k& v0 r4 K5 e+ e
positive for the year-do-date, including high yield.) M1 `" x' M* l+ y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble) m6 k9 A+ I( D5 t9 p
finding financing.
: B+ O# e+ Z: J! g; H% a4 M Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 l2 h) s1 K$ a3 m1 M8 k4 V
were subsequently repriced and placed. In the fall, there will be more deals.' y5 i/ X" I& Y, F( ?8 |3 x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 D2 L' l5 ~4 Q4 q6 x4 Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were B& h- b& L" A8 S
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- o) w3 m" X5 ~& x& Y1 ~
bankruptcy, they already have debt financing in place.6 e0 g$ j9 P& p# C( n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 e, C2 f) j+ t5 C$ g7 R. F
today.0 P- n8 Y3 I; N
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 E- g- _5 }9 B$ d" q+ l1 remerging markets have no problem with funding. |
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