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发表于 2011-9-17 13:16
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Current situation
, H0 \$ c4 n1 M9 k* @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ W" W' F Z+ O1 mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" ?' c0 s* ~$ x6 }, L% ]9 ~( i/ s0 q
impose liquidation values.
O1 U7 _; p5 _! r* g& T" w In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 S2 y- o# U& \2 N
August, we said a credit shutdown was unlikely – we continue to hold that view.
. W3 h8 b. c; E! x0 } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- U6 n0 @ f0 r& [- C0 _scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
: Z$ [9 M, y3 o6 T" q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. @# k* f. M/ m i, \+ G' W
September. Non-financial investment grade is the new safe haven.
/ M" B9 U! a6 S. B- J High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( ]( p8 y( w; |8 W5 O9 A4 Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" U I8 t8 v5 }7 F0 ~# q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# L3 e- V" ^& A5 X: E# w$ P. T; Q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 H) l; H" [( K/ LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* j$ U) @/ N. u; J. e( H; w2 }positive for the year-do-date, including high yield.
: _1 v7 _2 @$ @2 D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 S+ U5 a! @7 {1 |" t
finding financing.
" l1 J: ?3 ^! B' \% i! _) e3 a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 [8 P9 l, c0 @9 c" G( i9 zwere subsequently repriced and placed. In the fall, there will be more deals.
( b5 i' K- e H; B3 ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 V% F3 |2 B, x m
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were3 \4 Z: j8 ], }# C( [5 ]
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* u M T4 f- G
bankruptcy, they already have debt financing in place." B* {& ~4 Q& u2 X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 Q9 ~7 n4 y2 e3 K5 p' jtoday.! |1 P2 ^5 _5 H- u* M" h
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- _9 C% f9 Z' ?* T2 T5 R+ x3 V
emerging markets have no problem with funding. |
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