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发表于 2011-9-17 13:16
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Current situation
. _! |8 k& b$ @$ D7 Y; |2 } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
, J4 s5 X% M: b9 \5 F6 Y5 X/ {& n" oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' q9 `( o: x/ Dimpose liquidation values.* j# Z+ S7 ]( N9 l7 Z5 h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# N1 f5 G- Z/ t
August, we said a credit shutdown was unlikely – we continue to hold that view.
% ` U" ]0 ~1 O; d! m' \: Y# y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& D" A5 C$ l7 F" gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 _3 x; z. ]1 J) h ^
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A look at credit markets
8 r& G% ^9 G% a( l Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: v* m& }% Q o% F
September. Non-financial investment grade is the new safe haven.
) V: X6 y5 J( b; X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. @: R6 j$ a% n/ x# K* Bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* b/ C* R; e& G/ ?
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 C' v- m, j+ \/ B V; R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# _2 b; ~6 Q& P' r) ?0 a5 g
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; U* I! s. f5 q" ~ c. c" D. K4 T
positive for the year-do-date, including high yield.
6 s5 a1 V# ]( F ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 i) D4 M0 P4 n# R, g, G- B' Ufinding financing.8 X8 |; d+ b" }% c" @ k0 w, K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 r5 Y8 d) D) qwere subsequently repriced and placed. In the fall, there will be more deals.
* V+ v" }3 k. T6 ]; |" }4 |. C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- r2 N/ V3 Z+ Q* Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* N! z8 {. i4 @9 e) ^6 Ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ ^0 D, Z6 w6 U6 q" d
bankruptcy, they already have debt financing in place.$ @. a/ S8 w8 ~4 o6 M
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 O; I. H+ `( `/ j
today.3 T; p( }; n3 b' W
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, H8 \% ~7 L- a) [% Z. A# Iemerging markets have no problem with funding. |
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