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发表于 2011-9-17 13:16
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Current situation
6 i9 G* v; G9 H7 M7 `4 ~* u The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 P. D# z+ C# J1 J; O7 l
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( u$ R3 S6 E& {( x9 k& a
impose liquidation values.
: L5 `7 i; Q( h& f8 {$ D In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 V9 x6 k U0 K7 `4 U4 K
August, we said a credit shutdown was unlikely – we continue to hold that view.; N9 d" ?9 Z' A T% U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 ?7 C: v r4 Z& |$ N: X/ w K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( H# V6 C' D( V1 K* jA look at credit markets) `& H4 E) [7 N" f$ w" s: H, K& h- E
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" R3 b3 r$ P2 [ C' U* g3 u d+ @September. Non-financial investment grade is the new safe haven.
. X6 U x7 ]! m+ ~# |; |5 t% C High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% T# W) [$ M, Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 D* o0 I9 x& Q5 M+ m2 l
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 x- V( @8 p/ o0 Q* r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- g& } T2 W2 LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) E5 s& F7 J/ P4 p* S
positive for the year-do-date, including high yield.
5 [& w5 Y( c$ P1 Y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( [% d# H, ?8 a# K& n8 Kfinding financing.
$ ?" r3 @# t1 Y2 R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ c5 f& I$ Z7 A2 ~& k8 e
were subsequently repriced and placed. In the fall, there will be more deals.
6 N D( O$ g7 ~5 f* g/ q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' R6 C+ m6 W2 w7 o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 F; g. |( V7 ^7 N. ]0 igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ w( ]% I6 } Y* F
bankruptcy, they already have debt financing in place.6 J* h9 M0 ]: {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. W6 G+ l- E0 q p7 [! ~* U! a7 @6 ttoday.
" r- a3 S9 c1 J3 r Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ \; _( S( h0 ~3 Y! ?emerging markets have no problem with funding. |
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