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发表于 2011-9-17 13:16
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Current situation7 ^3 G" ~1 L# w+ I: F4 X2 f4 T# |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ N9 K2 W4 Y, e! A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 h" R* }4 x2 G4 `0 k# w
impose liquidation values.
0 N; u2 z; J$ n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 }6 n$ O7 `4 u
August, we said a credit shutdown was unlikely – we continue to hold that view.* P" p5 S( t# g" I1 y+ D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( V. u! A: Z5 R9 U+ V( w
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 b2 U% Z2 T! z8 D% j& f
' i' I, m/ o. m: M; U+ c/ }A look at credit markets# @9 V4 A1 ?# W& K a2 {! O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ v7 G! Y( v7 }3 bSeptember. Non-financial investment grade is the new safe haven." s& m( b# x/ {1 r
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 W1 Z* |! X% p. |# V$ H1 B& Kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 g7 ^ e" h1 `) w1 a
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% k5 u9 r3 h+ J/ Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% I0 Y' @1 b# \: NCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ i# `9 o- h! {( V
positive for the year-do-date, including high yield.
& Q7 R1 J+ O0 J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! Q* T: Z7 j& s! ^# i; u8 vfinding financing.% o) p" z P% [3 E5 l( s2 s! c& [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 }. w( C6 N+ x5 Qwere subsequently repriced and placed. In the fall, there will be more deals.! w+ v/ V9 j* I5 s2 B
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# w( M2 j5 L$ a2 ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 Q) @/ r0 u& G& k1 P9 T6 i/ ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: O1 W& `' v7 ^# T4 Cbankruptcy, they already have debt financing in place.
0 B1 V6 U' H% F* ]+ d+ S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 u/ \8 z8 y& [; Z
today.; q+ O$ @4 a2 S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- b) {* @' a3 E1 S2 |6 ?7 \emerging markets have no problem with funding. |
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