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发表于 2011-9-17 13:16
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Current situation
2 o2 ^, i+ h8 v6 ]6 c; x( J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ ~( H$ x( F$ r2 A1 o6 ]# Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 {1 u% g0 b3 @# N
impose liquidation values.
/ T+ v& T# q; x5 E; M9 L% Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) X9 B6 S+ E- Y" U% F# o
August, we said a credit shutdown was unlikely – we continue to hold that view.
: H. G& [# m' M The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ @3 X! k# }# Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# w/ Y x# s' g4 z( U* e0 ~& u( B7 PA look at credit markets/ S6 w& X4 X2 L. q7 K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 Q# f7 }) O2 ~# ]3 \
September. Non-financial investment grade is the new safe haven./ ?+ d- x& ?& U$ k) P
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ ]6 k( K9 B/ U3 ?
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! `' h2 @- j+ T. B" obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 Z6 y4 f0 g) X; A1 |access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" S2 i- S4 f$ q7 ?' F4 o
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 X4 ?3 o% q" ?- k/ a4 cpositive for the year-do-date, including high yield.
. Y% ]0 u9 I0 \) f1 }% M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 b8 D. C- |( I' U
finding financing. ]2 v' N/ J5 Q9 L- ^) J. Y) K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 k, g% i) X6 j5 d1 P6 F
were subsequently repriced and placed. In the fall, there will be more deals.
" F9 e8 h8 |/ f( `0 Z( l- M8 C- m Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; s0 x6 p3 y8 E& i, v0 x- kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! a6 {7 \$ E- B7 V/ q2 i t
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 I9 K1 s- |* ?bankruptcy, they already have debt financing in place.+ s+ H( R) n: T2 }' v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, {% H# s n' V" }* ttoday.( X m: I9 }7 T0 D! }: g V6 v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 p" d; q: z; @) D$ M
emerging markets have no problem with funding. |
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