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发表于 2011-9-17 13:16
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Current situation
3 Y o/ h2 Y6 m The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! H& S/ ~' }& ]+ tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
}! M6 H; D O8 bimpose liquidation values.: ^, b( n) s% L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 r: Z- b' o3 LAugust, we said a credit shutdown was unlikely – we continue to hold that view.% K& J& V9 S; p# V8 J' i5 k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! e. l3 l" C2 E, L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
/ d5 l( @6 n) N2 p; \+ d8 _; O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ `' Z3 M( M8 x% B! d% L3 j
September. Non-financial investment grade is the new safe haven.
) v: D1 \: \3 i& L1 O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* T) l, c. O. l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* U, d. v( }+ p r& h" k7 _3 q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 v. ~1 c C! v" \0 F8 B
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' k# o) t0 c2 R0 o( J. fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! _' D$ O r) a. t% T) z1 J5 k
positive for the year-do-date, including high yield.
, Y, j0 r# x5 c7 Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' A* \: w/ ~: t c5 ~finding financing.4 d, h5 c6 E& k5 K: T7 j
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they x$ Q% c- c. A. ^* i
were subsequently repriced and placed. In the fall, there will be more deals.: |6 T3 m/ T" p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! D) o/ f3 U& g9 F
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( l7 \$ w/ }6 t) Q9 X) I; j) bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 Q# p7 s9 u+ c( Q- L
bankruptcy, they already have debt financing in place.
* h! c9 _: X9 q0 t European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" u) |) E# H; T7 n- c
today.( R* Q2 v( ^' {9 t9 X" I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( B1 m3 _0 N% ]& Y f& x- kemerging markets have no problem with funding. |
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