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发表于 2011-9-17 13:16
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Current situation! U! v* |4 W2 R# G, e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 W9 r& S# u5 y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ s# X3 ?# k- G" ~( r6 M6 Uimpose liquidation values.& C1 G5 ]- z P) X Q4 K, X
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* i$ Z# n0 m* G4 Q
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ N' I- j0 @ H5 F/ d. R5 g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# D; Z: L" n! p" A1 _+ l7 m. a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( V0 X+ R1 d( y! l( A9 @+ `# }" y
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A look at credit markets# e! f' L! z4 I0 T4 H/ o9 b
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% M+ E4 h% M3 d- d9 ySeptember. Non-financial investment grade is the new safe haven.4 U r _" A. j) Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) ?! l2 Y! m3 }( z2 i8 }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" R! P8 v: {: R. F; Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 f U! `, R0 k+ g3 P) Q4 h+ h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% I: S; G" a' u4 SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( b8 f" K/ b& {9 X
positive for the year-do-date, including high yield.& @ c3 p9 Y% l/ O% T: _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% A; r5 Y* k6 _0 c5 ]
finding financing.
$ ?0 R' _3 e5 B7 {, C, ^- Y- _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 ^$ ^( B' R/ ~' F6 m/ [$ V3 C' Zwere subsequently repriced and placed. In the fall, there will be more deals.
/ k5 X9 A3 G& O# W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" q. Q9 B8 x) Z' \7 Yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 w/ P; R8 H1 T% O( Z8 x% _
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% x% G+ k3 P# a2 bbankruptcy, they already have debt financing in place.
& ` G; g& E8 ^% B( Z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ `1 D7 h I7 Atoday.
& C- Q7 a5 G' J: S Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# {; k7 d T" V1 o* u
emerging markets have no problem with funding. |
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