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发表于 2011-9-17 13:16
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Current situation
& j: `' S0 e! f2 E* b9 X4 [) N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
v4 U# ?: z+ Q( c) Tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 j/ J5 s* w1 L; q- \
impose liquidation values.: s: k4 _/ _* C( M1 l7 [
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: o7 v& z8 k' |5 y6 Y4 M8 L
August, we said a credit shutdown was unlikely – we continue to hold that view.9 U0 A1 @$ h% D2 V% k V- d. P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, o& v# S+ g: e; c% F
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
0 I; e/ w, v& b3 b: [9 f9 G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- W- ~ d, F% G/ K) ySeptember. Non-financial investment grade is the new safe haven.
; k0 k7 v: g# v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, Z8 x ~% U1 I( e: [; z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 Z4 u- e5 R# ] M' Z! T2 k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" U$ ^0 G4 N# ] Z* n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 w U: V2 @8 S% vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 U) o, p8 ~* J0 k' e; W
positive for the year-do-date, including high yield.6 y$ b; j& d3 h# D$ V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 E% _3 M* T* b8 l
finding financing.$ [4 z* U) ]- ]4 Y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! b; O, j/ Y# @5 n
were subsequently repriced and placed. In the fall, there will be more deals.
8 @. x8 m3 B% Z( Q5 J+ x I Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 @: s4 \; o) G# A" ^" F R O2 J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# W$ t! y2 ?* _7 Q/ a @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% Y* F) r O' r8 U* j
bankruptcy, they already have debt financing in place.
0 k# v4 e7 V; P, t( c% T European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 _- U4 I2 I' u/ E5 e# ytoday.# Y* w; Z/ l9 t4 H/ ^
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 X( ^# C: M5 y8 demerging markets have no problem with funding. |
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