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发表于 2011-9-17 13:16
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Current situation
( i! a% k- I% V( x The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 z6 \0 }" P5 {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 q5 H9 l2 `. v' t
impose liquidation values.
. o0 w% o! J) z, |* k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 v4 P% ?# e1 ^) QAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ J4 e; L" M1 v$ E! s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 ?( y# r& o" H8 lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* _# e6 U/ ]4 T# V. G0 B6 Y
1 H* w2 v1 l* Y2 u/ i* M2 [. P
A look at credit markets3 \2 m2 I9 m# o- V6 S* _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. t& \; w+ C7 ]6 P8 Q: r# V8 g
September. Non-financial investment grade is the new safe haven.
1 x3 ^; u2 \2 ]* ~3 x5 y0 O0 I High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 D6 V: i% M( s; Z) _) z" P. Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 z2 z7 N: z i( F2 y( T9 O0 _: @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 l! J- g/ I) L4 M" F8 aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" i7 G. I* c, N% v8 X
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 O6 R" t; C+ A2 i* tpositive for the year-do-date, including high yield.7 H+ f4 c0 ?9 ^, I! X9 J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 y1 l( `2 L+ e6 U* y: l& `$ H4 \ L. }
finding financing.
/ g9 q* F9 V6 s4 H+ y" \ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 ?8 n+ @7 j! j1 }6 B
were subsequently repriced and placed. In the fall, there will be more deals.
3 |4 j; z' `) C$ B$ [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" K) V! `/ \! b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ [4 S( j7 W! egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 a5 h( E& Q* L2 n8 F f
bankruptcy, they already have debt financing in place.5 ^. p! f" J! ]0 \5 h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 j s! ?# _* m+ |8 {3 mtoday.
2 Z" l$ f) _, D- o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 w/ ~, U. n/ B+ ~( @; g- j2 r( ]
emerging markets have no problem with funding. |
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