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发表于 2011-9-17 13:16
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Current situation" s, E( j5 B1 r/ W# I
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ G8 b4 `3 G% }' ]0 u
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: k1 F$ k. ?) g2 u* T) B
impose liquidation values.
& }' L8 S, G1 R, \# `; J In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
n, n2 }# [- |August, we said a credit shutdown was unlikely – we continue to hold that view.
) K6 m6 N: P# f N( ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! q8 y) `. w' ~& ~scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ V/ \ H: a- Q
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A look at credit markets' `* b. H4 j3 {0 }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ C' Y/ Y) j1 J* ^! O/ C; Z: j
September. Non-financial investment grade is the new safe haven.
5 p/ ~" h/ R3 } High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; T- T" F- L. `. M. B8 Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 q- F2 P0 E }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 S4 c8 l9 Y' Taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 _. m- N \, g4 }3 f) Q) t
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are& ^! T' z! f5 O. ]0 }5 C
positive for the year-do-date, including high yield.# \* P) f" J3 a7 s' ~' s$ H
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 y$ ^# W7 b4 q* ^* {; e: f7 V
finding financing.3 [' f" e* L4 E4 f% [ M+ J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" i. `$ B9 F- O; p) \were subsequently repriced and placed. In the fall, there will be more deals.
- {8 G" A) a) ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and8 }, }& L" n9 H* ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* ?6 F, e" c: m( s+ `$ F! Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! J+ V& w! u7 N8 P& y: O; H7 Mbankruptcy, they already have debt financing in place.
, D% v, `8 X" T- o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 b. y5 C' I/ Q( c$ z# P; R$ ~
today.
4 b4 `5 M7 V* T& ^5 b Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ J1 T+ q1 C3 S: h& Y, n- y9 Lemerging markets have no problem with funding. |
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