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发表于 2011-9-17 13:16
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Current situation5 Q4 w. U' O- h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( C1 T6 D9 Z% s( Q! ]: N+ v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% s& ^8 \- C2 y) l9 j4 |
impose liquidation values.
8 C2 _; y; g% R# ?( B' j( ] In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: @- b% a7 D4 S# N$ x) d5 P* z8 A# xAugust, we said a credit shutdown was unlikely – we continue to hold that view., X v0 H+ R V, ]$ p D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% d( L. Y5 R) i8 }+ J: i' D$ C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 X9 _+ v% O8 h! Y, iA look at credit markets9 a+ k- _- ?) U4 u& p }& r8 V
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" H ^, |* ^% y0 i# P+ h" X3 W% D/ t
September. Non-financial investment grade is the new safe haven.! J* N$ E/ E5 H9 t8 c1 Z, L
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 @# \+ B% N+ }; ]9 e1 P
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, K$ w; p, |; V! I; h7 U2 G
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, a5 l- B9 T' N# z$ j0 w L
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 i9 F% G! Q2 s6 U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 i7 T2 ^# |) w7 W6 [
positive for the year-do-date, including high yield.
( ?3 |* X& ?* b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 X X4 K1 u" c2 P6 Z
finding financing.
3 G: {# t8 u2 E; `3 k, @ i: { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# H/ E. O0 U# B7 t0 M
were subsequently repriced and placed. In the fall, there will be more deals.* C j3 P: V& _0 K4 h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* E! w( |$ i: ^3 X7 z: uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" J2 {8 Y4 z$ F8 T2 ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ o$ |# v/ g) i8 k# @: Qbankruptcy, they already have debt financing in place.
7 u- r8 O) L% D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 ~5 m! Z$ @. i! D9 z8 j- J% p
today.9 q% G* O9 L+ g' C" u" \. Z: q0 B
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( @: G8 K( M# t1 W% ]9 I
emerging markets have no problem with funding. |
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