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发表于 2011-9-17 13:16
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Current situation/ ]7 H; J& A5 j7 j* s; |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% i; q1 L8 z* \. Q" [- Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- U$ a1 P5 ~$ h% f# f- B/ W, ?6 J* nimpose liquidation values.
! C) x. {2 ^$ j( }/ z6 G4 ` In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 q Z2 f& M/ E
August, we said a credit shutdown was unlikely – we continue to hold that view.
2 L# x0 m+ L; I; U6 T5 ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. k2 C8 a7 d: D9 n- [1 k6 C/ Tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' t4 N, L0 l% H6 j" t9 ]4 s
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A look at credit markets9 g5 C1 D7 i1 C1 {9 F/ V
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; n, d. x; A& L" I# R# N- G* v
September. Non-financial investment grade is the new safe haven.# _/ L* }& G) c
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" e5 u; m# f4 e/ D3 m* ]5 h7 vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% ]# W* z5 M7 w/ y: V
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: @5 B2 y/ t1 H5 G! o d1 b1 f- U/ Qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% F4 R2 v: s q5 W' ACCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! l- C! e" ?) v7 y/ S0 p3 dpositive for the year-do-date, including high yield.
4 _4 w2 O( {4 y" u Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! \+ s9 Y1 O% e+ a3 Q
finding financing.. G7 j. J3 I- J# ~3 L# y, l' K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 K9 Q; [; e0 l, e! Zwere subsequently repriced and placed. In the fall, there will be more deals.8 G- o# r3 u2 Q! f7 ?4 I% E
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 e- t0 _% P; R/ _+ w9 Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 P; r; j% z9 {" X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ F7 v4 r7 ]+ U% h. T4 f9 pbankruptcy, they already have debt financing in place.
( |" N+ X; c# L4 I+ |- F L" u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, R, X% v1 c, Y; f X
today.
! Q! w _ I# @* O5 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; ^! q+ s. J2 b$ O3 G5 P) hemerging markets have no problem with funding. |
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