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发表于 2011-9-17 13:16
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Current situation
' }' b1 ^) o6 S2 `+ A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: b, Z9 [7 b' @! z5 R2 n; L7 C( }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ f0 p8 O' `8 e. ?$ b' H. ximpose liquidation values.
# a0 l& B7 h" X9 u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, ^7 q1 |0 G* w7 Z; |
August, we said a credit shutdown was unlikely – we continue to hold that view.1 v& {' j" h0 K) h5 H5 ]) Y' r. i. V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension7 V3 q7 v9 e* J( @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# S% u. }( C9 c! [( W) \, a. bA look at credit markets
9 A' I! Y; N# _( V+ O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 K: _3 s% ]7 V R
September. Non-financial investment grade is the new safe haven./ K# ?' k" ?2 E) x2 {. [3 W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 ~6 j2 c. Y- e2 l& O. s& |! L! t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) F8 K2 y, u6 V$ j5 Q3 ]2 Fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 p! _( s. P0 B( K0 `; n8 S% Qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ `- H! U: b3 p0 u2 g2 M) P( xCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( f3 P# W# t& P+ O
positive for the year-do-date, including high yield., \3 Q/ G7 d# U- w5 s& U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# d' }/ x% g% }. o- U7 c& jfinding financing.+ S) n5 W$ |9 \, P P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; g$ y3 `# y) T! }" A
were subsequently repriced and placed. In the fall, there will be more deals.9 ^/ }8 x0 S* _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, v$ p: [, m6 L$ cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 ~) j0 i& R8 f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- t9 a$ p+ u2 ?6 xbankruptcy, they already have debt financing in place." A/ i+ E& w0 t5 D3 o
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% A8 {% d, w9 c' S( Ytoday.
* J. H6 t3 O% I P: P! m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 w( o& ~# X5 K7 e! q/ g4 |: Yemerging markets have no problem with funding. |
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