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发表于 2011-9-17 13:16
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Current situation( ~4 j% B. _) L% c* L }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" C+ J) j8 K2 r( V) v* ]as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 g- J* v. F5 w5 E8 }impose liquidation values.
2 |7 D# c% }, m" ^% U* T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( v3 T" ]- p) f; y/ v' M
August, we said a credit shutdown was unlikely – we continue to hold that view.
( v0 u! K& J& E9 s! v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 y" C$ ~1 j, Y" w$ k. S5 i5 I6 t: M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. B: P* F- G% m# f
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A look at credit markets
' d( k- V2 t- G& x+ X Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; t7 L) H) n% B( lSeptember. Non-financial investment grade is the new safe haven.
+ @- i M1 q) l/ s6 S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 o" P* Z U6 X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! `7 q3 l2 B# O q+ m" q! o/ ] u( |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. ?1 l1 e/ i7 m9 p4 waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 X5 Q! b, C1 W. Q# m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 G; Z" m, g. ~7 \) H9 X
positive for the year-do-date, including high yield.
( O. P J( B7 n; C1 s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, D) O: _) L3 g! }' @5 {' j$ x. z7 c
finding financing.
# z! a( s% E1 I0 C) Y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) O0 u& z0 p2 P: {7 S6 p4 ~* O
were subsequently repriced and placed. In the fall, there will be more deals.' ] z# x- X7 e( Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ f$ D0 D. b. ?2 G/ R z7 v% o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 l, d; N% p! p' e0 _$ B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 y+ _9 L L8 E1 \# m" t
bankruptcy, they already have debt financing in place.
4 u- ^) i; M0 o% j& h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 Y7 i8 ?! T, p8 J+ E/ htoday. [/ _6 m: i" K5 I7 k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
8 y5 ^( `3 T! eemerging markets have no problem with funding. |
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