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发表于 2011-9-17 13:16
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Current situation
. J3 d6 A0 b; i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ i# }* @5 m- y s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 x% o$ h1 Q2 P
impose liquidation values.
+ p' r2 t: } A R In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 y8 C* ]' {1 \& B* BAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 N7 ~, E5 g2 _8 f8 J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, O- ^9 e0 d! m, y( |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 A. d; j6 k( C' d0 e. [4 k
) R7 r9 v. j) `" r* i% pA look at credit markets
/ h8 o, f$ s2 J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 ~$ s( ]$ Z9 u X6 z5 j
September. Non-financial investment grade is the new safe haven.6 `6 ]) W( w2 a$ u
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) a: @2 T1 M% y- L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 G# v$ ^5 \6 y7 x
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! o0 F J$ B' j0 g- U+ s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ m6 c2 k- |. Y! }! Y8 `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 Q" ]) N% t$ e1 W4 opositive for the year-do-date, including high yield.% r1 [/ x* L$ D/ j3 b5 F6 q" i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# v6 L- L f, x5 ^; e% `+ [finding financing.
% E4 K' N1 r- X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 m( g4 a8 u m" X9 Q
were subsequently repriced and placed. In the fall, there will be more deals.
/ f1 x; \) j2 l7 r' Y0 n1 n Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% p2 k- c7 m7 T) M) u$ t" j7 m
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& i" H& f8 O& l8 K3 Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ }( a ~7 x1 c8 f/ ^bankruptcy, they already have debt financing in place.% d3 `/ b7 @. E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 p% s5 r2 ], Wtoday.+ Y0 C# K" |; c+ A
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 b. Q* o g+ @! k$ @5 h5 o' {% W
emerging markets have no problem with funding. |
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