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发表于 2011-9-17 13:16
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Current situation! y; W4 i1 \+ q! x2 r8 {# }. R
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 V) D6 [! P ]1 m5 S( @
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ D* G+ x7 M p; Z8 G P
impose liquidation values.
1 e( t3 @& g2 [+ o3 v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In q+ b$ b+ k, {! r _: E, g& m) K
August, we said a credit shutdown was unlikely – we continue to hold that view.
1 c. R! E2 j# J+ T& e! J8 p8 a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 I8 ?. B( c! |% Y' y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. }& ~ J5 D" K) o
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A look at credit markets% D6 b, Q) M. G! ^- p; o8 I3 u
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 _1 @) ~6 z. u
September. Non-financial investment grade is the new safe haven.
' q/ R- Z1 F$ t: u1 M. B: j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' F v1 E4 v9 f- k. T( Dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 ^$ A, g( D: Z; B, Kbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 t p! C) ?1 X2 T% m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 m* [5 E. } a$ v& gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' s+ v8 K" a+ }positive for the year-do-date, including high yield.: m( w$ N i: k) ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ J, d" i! d+ A( a/ a H- q
finding financing.
( Y2 c( A8 e D _3 R" R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they t) n, f# w% G) Y) U* r! r# }
were subsequently repriced and placed. In the fall, there will be more deals.
# \! I: X, A/ b% ^4 i Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 l, ^8 R! L& V9 \/ P8 A
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 M ?: U7 L0 _, s4 \2 A5 Igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 o: W s8 f( F" N8 M- D% lbankruptcy, they already have debt financing in place./ q* S- T) e4 S* p- ~* F
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 P, X: v" F7 Q7 xtoday.
. e; [( W" B. S8 @; O: m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& l% y9 L7 r8 v, R
emerging markets have no problem with funding. |
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