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发表于 2011-9-17 13:16
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Current situation% _! w2 [2 a7 M: ~
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' K6 j4 S: i9 ]* s6 y! Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. f3 V% K! N( b) u/ @) g5 f0 A! Nimpose liquidation values.6 ~ m( s: U3 s* e/ Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ i6 m0 O1 `9 aAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: |; I: Z |( g/ r9 Q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& Q5 \6 G( F$ S# Ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 X2 r) `6 M r& z) u9 w
$ ^/ z& ?5 o# Y' @; s4 OA look at credit markets
/ _/ b2 O9 h8 I2 ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ E0 x9 ^" b+ p8 K9 x& pSeptember. Non-financial investment grade is the new safe haven.
# d `2 h1 O p7 R1 z8 q+ D, I; A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) M% Z% ^0 @! a
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 |+ p1 u3 Y/ ^3 b
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ L- c( C m6 gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; ^9 Y) ]' |0 I# X3 o% P, P
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 H8 c+ [, x/ C( {9 G. b
positive for the year-do-date, including high yield.) a3 K) F0 N. q0 y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 d! i& T( {# y) Y
finding financing.
; H) X C8 M0 U3 T1 x$ f, o Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 d" L1 N7 [. ] K F2 ]- ]
were subsequently repriced and placed. In the fall, there will be more deals.
& _0 }: a0 ^4 Y9 y* q" U' F6 r% P% i& N/ y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 @! W0 V; A1 t l! ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ [; G3 {' @* A" m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 `- ^$ ?1 {, x$ t$ ebankruptcy, they already have debt financing in place.% E( f" R% [/ r- I' s! h/ Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& k6 Y* `! x4 T9 y: Q) Ttoday.' O/ Y' y" ]4 q( w l
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 j7 P, W6 o4 t4 l9 ?3 Semerging markets have no problem with funding. |
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