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发表于 2011-9-17 13:16
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Current situation6 q2 Q6 z$ }9 i+ E6 h3 X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, o6 }: R Z- q3 ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) X* z" X( P9 M) b1 Q2 }
impose liquidation values.' r z& ]8 u) D; m8 A: T$ h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# p# T% Q7 b5 _. @. Z0 ~
August, we said a credit shutdown was unlikely – we continue to hold that view.8 A2 w g8 Z/ M4 Y# N" e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. W' y$ T% {* C1 ~% ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) |, _3 A! k% l2 U. pA look at credit markets" ^+ s7 }. p+ S( R* C9 v
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- k6 u5 U+ P1 A
September. Non-financial investment grade is the new safe haven.
# d. q7 e/ o9 F# f0 b High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" B: J- N0 T g
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- M% w: ~ {* i
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) T/ e' k, h% n7 q% j$ aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' Z6 j _1 _3 o/ I5 \' Q/ y/ J% DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* S7 Z5 S8 e' }4 V0 } gpositive for the year-do-date, including high yield.
+ Z" b2 `5 u5 J1 a4 R0 A: w% ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" ~- S7 l5 u4 V8 Yfinding financing.* f2 B0 b4 W* h+ ?
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ z5 q; p1 F% ^. V, S8 z/ ]: @
were subsequently repriced and placed. In the fall, there will be more deals.) w- N8 ^" N8 o) A
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. r, t3 Y: v* D3 \is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ M% Q& @8 L$ t# K- M5 T; h$ `going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 L3 m+ R8 Z( c0 H& z2 F- [/ x5 S1 {bankruptcy, they already have debt financing in place.+ O1 n2 X3 o' B( B2 D# k/ x+ K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 B* Q4 N$ W- H$ ktoday.
$ C' e. T" ^% I* p; s& a Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& f2 T5 t' h7 m7 P' r8 C
emerging markets have no problem with funding. |
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