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发表于 2011-9-17 13:16
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Current situation
: y# ]6 |# R( Y& i/ K7 ^% c' \, m) k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' O4 R. g/ V6 S2 I0 B1 Was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 o; u6 {2 r* e2 Z& ^$ L
impose liquidation values.
& _4 A1 d! o' V# ^/ Q1 Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 k) I5 Q4 i" Q6 b5 Y1 g. R* oAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 J) L2 P4 Q" `5 C5 Y# Q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 q" |5 C0 P, P/ tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) B$ d7 v m2 KA look at credit markets4 u* m/ ^0 D6 U8 c. m' M: K9 s0 H
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 i1 T) l2 c2 \4 l
September. Non-financial investment grade is the new safe haven.
! U8 G7 p# m3 q7 u5 P! Z* m) y; P+ ` High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! [3 E3 g- O. T$ Q! c8 ~
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 @! p1 w, y8 O Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* G7 r6 N. Y2 p5 m) h3 P8 haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% l, r) k! | d% kCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# V D* d6 B0 F5 ^1 g$ X' [positive for the year-do-date, including high yield.3 Y$ v- X2 m7 c$ x' {7 {* v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- u/ X0 `4 j3 T& `4 n
finding financing.
. t l, f' ]. A6 m, I! A2 n Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ @4 O( x1 r& n: t9 l$ W# }5 w
were subsequently repriced and placed. In the fall, there will be more deals.
% m* }: Y+ D1 F3 G+ }7 C. X9 H Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! W- p1 ^& l, O+ u# L: fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- x6 z7 [2 H% N$ K# |; Q9 a- m0 A+ Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 h# ]6 ?$ r2 D6 C
bankruptcy, they already have debt financing in place.
5 K. G8 V( H0 o& G# R& t9 V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 p9 M: p- Q7 v; A0 t% H6 \& Wtoday.# X7 T' L, I) Q8 B+ P( J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 ~3 _9 R' a7 e8 J
emerging markets have no problem with funding. |
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