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发表于 2011-9-17 13:16
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Current situation
' z: `8 r4 i8 M- u6 u3 e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" l1 \5 {9 G# W" z0 F: Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 i& ~; I! l* simpose liquidation values.3 ^+ z9 T. B x: U5 K8 G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ T9 s: m Y+ }; n( J" dAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 ?8 y) H6 U X" @( H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( j& a. t t3 Z% o; j- c- L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets: g5 G' Z a) O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, m0 z1 [1 Y, _! o
September. Non-financial investment grade is the new safe haven.
0 g7 D& z8 X# s9 q" Q! @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! u }3 \7 v, ~( @$ U6 b& P. C7 }
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 z3 L8 f+ N3 j k: I, ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 K5 _' M/ E% X+ xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- K* S* w$ b- f! B$ G& _; dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: a( W, e5 V5 o* n O
positive for the year-do-date, including high yield.9 H- H& h) U; {$ D! W: p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, o! K. v0 E, R6 ?" u1 ~7 p* yfinding financing.
1 o$ I5 g6 `9 a O; n; Y+ t" { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" i6 R* A- o5 N" Y: c
were subsequently repriced and placed. In the fall, there will be more deals.! x; j, G& s# I/ x" \! O
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: O8 c& B) y& A1 V4 m6 his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 h& F/ j- D$ [going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' u) i0 k7 r3 B- O/ Q
bankruptcy, they already have debt financing in place.
3 U0 ~2 A$ d$ m% v6 g+ e* r* U9 U European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( q0 O" S3 c9 S( l, `: _0 P& ytoday.9 M G' ?$ x8 x0 o; k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 F$ a( n$ z4 E; B# O& Vemerging markets have no problem with funding. |
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