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发表于 2011-9-17 13:16
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Current situation; [( ]& E h1 J0 W! v8 B
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* S; p! c n) `as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( w& z% \, {8 l7 D
impose liquidation values.
- T3 T6 {; [+ v" ]9 p' J4 w In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, Y# \6 w, t1 D4 L, ]+ l3 t$ V. aAugust, we said a credit shutdown was unlikely – we continue to hold that view.
& }$ j; f9 r: `, Z" L' ]" V& @ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 f' N$ }7 n$ q, N( W& }8 _2 Z* V
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% H5 q8 T& @) o
. O% O* }7 ^* F5 z- QA look at credit markets
; O4 N5 Z- P& F9 U/ L4 I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) O5 `+ q& I: F$ ^, f: N+ u
September. Non-financial investment grade is the new safe haven.
- n$ N. Y* \7 V4 @* }% i# ]8 x# B& D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" K# V2 a' S- t* |. S W0 Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) b& L$ f, N7 E. o! Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 j1 M! ]* ?1 a G' I% E8 b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) w/ ]7 M- F0 m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ j V! A* u% `& J$ _# ^1 N; tpositive for the year-do-date, including high yield.- f, [6 x, Y, U" s
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ @! G, y. R4 t" s
finding financing.# i" `5 N' u5 f/ \7 C8 r8 s
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. _ q6 ]. g. h3 N3 Q
were subsequently repriced and placed. In the fall, there will be more deals.
J9 t7 N* v# [; Z/ l. ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% i2 o8 w' z" X
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 K F G$ _0 }' K+ Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& G! {/ h, v t* _) i
bankruptcy, they already have debt financing in place.
/ A# t6 b) k1 d" Z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# M& z& S/ m2 R1 x9 q- k! Ctoday.9 c3 F. [: n/ w5 {
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. _7 W- Z) c, u; femerging markets have no problem with funding. |
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