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发表于 2011-9-17 13:16
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Current situation
0 ~4 Q! _9 D2 u/ I5 g' M' J X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( ]" _+ _, u. \- Vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% D6 W+ h8 V n* d, }impose liquidation values.7 i' y+ u; W8 [- I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& W8 i% s! T7 u( S1 }5 J7 hAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" K! S5 ]8 F2 z' k The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 J* A) Y& k, c" f- c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
- n( o1 ^ N! c5 B Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 w3 w; E# ?% m9 o& F1 w. PSeptember. Non-financial investment grade is the new safe haven.( l3 h" J! r0 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) J4 p8 G" r; B8 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, d5 `' {0 W9 ^: l. H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( \, h1 A3 } Z$ R+ W% V5 s* U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: A# }/ T; }0 B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ M# c/ c; z0 Q p4 J
positive for the year-do-date, including high yield.6 v/ t$ q* A" ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& C7 ]1 ~3 U R, ^; Mfinding financing.$ i- n! I6 [8 X/ y* z; g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: V8 U" w! r& Qwere subsequently repriced and placed. In the fall, there will be more deals.
' [ @7 J8 O$ ~# N Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, r0 {( m+ B2 s4 g; Iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' M" Y7 C1 W \2 [/ s: [+ j. J: C
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# ?% j' |, F/ X' W' ` tbankruptcy, they already have debt financing in place.
2 W" M" p# y9 q! f6 @! [; K9 f European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 V2 r, x1 O S9 M0 {' G/ b: Utoday.. N5 Q$ S8 h& j1 F3 m( m+ Z" e* k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% d. V( Q7 A4 Q: @5 N: ~# [
emerging markets have no problem with funding. |
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