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发表于 2011-9-17 13:16
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Current situation
' y$ O G$ n6 Q( S2 X- T8 v The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( o8 Z/ b* E& @! b: `) |8 Mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! P! s- s* F: k3 b
impose liquidation values.
0 P. i+ w3 l+ w+ i% Q* W' B6 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 }! a+ ?: m" R* A( V
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 i6 k6 R# z; w9 n/ u' u' p The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 z& C1 |7 p: Y& Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." r! w2 R7 s1 o" L$ E
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A look at credit markets1 ]) n) M) {7 M& z i
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 q/ c/ s5 |; I! x6 |* N. FSeptember. Non-financial investment grade is the new safe haven.
# a4 v/ K+ \; c* Z; U* r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 Q( n) V2 h% T: y- |% @
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 t6 ?) R. s: X/ X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ |* h2 b7 M* M: P) E3 O
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 K2 W3 m: p6 R/ ~$ YCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. }- m2 R9 a+ o. E J! u( ]% |. jpositive for the year-do-date, including high yield.
' i" c0 B& s" I+ ?" I; @' ~- ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ m# I7 d* q* v% t) i/ ]. [
finding financing.7 U a5 d& k8 c/ Z# `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 w, q" s+ O8 R# Q# U2 ?* N- a2 {
were subsequently repriced and placed. In the fall, there will be more deals.9 K9 y2 \+ D& R0 |0 K; K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& p( {" a$ m7 ?5 Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 s: p1 ^; C; u; ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 i9 S6 z* Y) E0 x4 ]7 B( x, Gbankruptcy, they already have debt financing in place.! P0 n' H# y: W7 d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* P* a0 T# m& Ltoday. w; ]. _2 N1 y5 m: L" x" o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" N' e: M( s# X7 w* hemerging markets have no problem with funding. |
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