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发表于 2011-9-17 13:16
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Current situation( _2 G3 u" a4 t) O. G
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 e2 z9 x6 Q+ U8 D# G; o% Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. S$ f, |+ a% Z+ i0 t$ k. W/ ^impose liquidation values.
8 i e+ j0 D/ a' s9 @, q, d/ Y7 H, x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( u$ n2 g7 ~- L3 J
August, we said a credit shutdown was unlikely – we continue to hold that view.. b# D& H$ `2 Y5 P3 g
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 O7 o' |7 E! V. _* nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 [1 B7 z# [/ l& H* \
+ o- D$ a# @2 O7 Z( y$ ?2 w
A look at credit markets
4 a: C0 g" A3 d! R/ B$ l' k Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( q+ }$ I: `2 l0 p
September. Non-financial investment grade is the new safe haven.
0 Q9 J" v; @& z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 S. O9 S) y3 V* \& r2 F6 |8 pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( z1 y3 @! M. G0 M! k" N
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ ~8 ^. l+ o n, c3 h& }. r8 l8 [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 ]# N5 ^, @4 e2 v) ~
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 B5 ]' j Z0 r/ c! O- ipositive for the year-do-date, including high yield." y" U$ d+ F. q* _) W2 [" E N
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& B/ z& B& d$ {finding financing.
" t- n& t; Y* [! P# |1 G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 q8 T9 }& {# K3 Z( W6 Z2 ?; i0 X
were subsequently repriced and placed. In the fall, there will be more deals.
: { J4 w; z1 U5 t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& q! z- I/ @4 ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" h1 \2 b9 x5 R% u# E* {2 s
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; t! D$ j: O6 {% Sbankruptcy, they already have debt financing in place.
8 c4 p: i$ T$ K, M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% P# }% }0 A" n! l8 `. S% x9 {; p
today.7 @ H) u! }: m( v9 ?( y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: v1 m( b) P( g! w$ N% iemerging markets have no problem with funding. |
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