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发表于 2011-9-17 13:16
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Current situation5 |5 ^/ O- ^* T* p$ c" O) N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ i r1 X# A3 g! h. D
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ W: w. R$ V: q$ G
impose liquidation values.
5 w' m: R5 ^6 V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 M) `' [1 P. b4 r q$ _* e( d, @August, we said a credit shutdown was unlikely – we continue to hold that view.; A# j* t4 f0 n7 h: ?4 I4 _) g) m
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 ?" k4 s- U2 u. Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; y+ A& ]; W7 }0 S9 Q% [
5 Q! L9 U) u+ e: \* l& I2 QA look at credit markets3 }( N( Z) y7 S! B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 C( @9 V& ^! E/ y
September. Non-financial investment grade is the new safe haven.: ^5 w7 i0 O6 H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 d S5 \: M# {7 A% @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 m: n9 s4 _4 l/ x* K( L9 L" S' sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 m z3 ~6 t' v# y$ l( V$ {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 j0 a! n$ b0 R- s1 B' \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! }/ ]! ^ ^ q) ?2 m: L# X, Mpositive for the year-do-date, including high yield.0 F1 P4 D$ m8 x: d& e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 J$ ~) ]' \' J6 O5 L( Afinding financing.
% N% `' n/ r# {' [% t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 o1 P/ h' @1 _: w+ [
were subsequently repriced and placed. In the fall, there will be more deals., |# C; W/ _9 _9 X
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& ? l' x$ |! d/ M# C2 g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& _: I' c" K% a! u( P. @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) ^& e5 D! ^: }2 n; Z; L2 s" `/ S
bankruptcy, they already have debt financing in place.* m! y) j& |& o# I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& ?( k4 I2 @* Z: E, Gtoday.
4 R1 ~! v, K( e( s l3 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 a3 ]6 L/ E" G, }% C0 ?7 b6 v
emerging markets have no problem with funding. |
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