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发表于 2011-9-17 13:16
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Current situation K2 q5 B/ ~* ?; }9 O5 s! {
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 t+ W0 i; z* b/ ^$ V+ ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 }5 B8 m5 t/ D( }% t! g z8 C
impose liquidation values.
- S. f& X* B7 f% v9 c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ L2 q1 U8 a1 M5 ^: Z( j& E5 }
August, we said a credit shutdown was unlikely – we continue to hold that view.
! r0 v1 l' f( W The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% ?3 }% @6 |& ~4 C, y8 n
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 O1 M* v3 R' @* v7 l/ {6 d
j: i* V4 \* y/ p
A look at credit markets
, i+ ?' F6 G5 f c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- y/ e+ ?! J% O0 e2 T" ]$ SSeptember. Non-financial investment grade is the new safe haven.
1 @ Y ?7 ?. l/ J6 j- n# c7 ]3 n3 p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
Y" w6 w9 Y% x- ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ `' z. f0 r; z4 T' w& M
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; I& |3 [; y) C+ x
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' M0 Z' ~# P$ b% c
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# E' {% M% \/ x& d. T
positive for the year-do-date, including high yield.5 k4 j/ `7 Y% K. b: |
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ y2 h- t2 y% c" zfinding financing.+ L# ^2 g! F3 n' n7 ]/ _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 N- V& f. ]) z0 ^were subsequently repriced and placed. In the fall, there will be more deals.
' |" `* n6 c$ P" K7 m- ~' h, ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- T) C& \* h! f$ r" [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% z+ q2 C, }/ e7 `& s% n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( W) s9 x3 ]2 Ubankruptcy, they already have debt financing in place.( S1 f4 j: F* Q; C: _6 O' x' w
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, N7 i/ I# T6 p" i1 ntoday.
& `. }* o5 j) O0 Z2 F/ y! H1 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ l l0 o+ j* K! J, N; C2 M% u. iemerging markets have no problem with funding. |
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