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发表于 2011-9-17 13:16
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Current situation
7 v" [6 j; v9 `+ O; T4 Q# d6 S" @. q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( R4 h$ J2 y6 j1 A& `as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, \+ K0 f9 d Y9 R$ Jimpose liquidation values.* S7 \2 y# ]9 }6 _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 N# r% f0 a. lAugust, we said a credit shutdown was unlikely – we continue to hold that view.
5 Z% m. [* d) A The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ O+ T1 S; {* A K4 _1 t* L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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6 w9 Q& G2 d% w+ Z- [* UA look at credit markets* M) k( x: h: f- W1 W
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* E, k# c; n9 Q
September. Non-financial investment grade is the new safe haven.. c7 V5 G+ O) l9 L& L3 C4 t0 x! v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 i0 b3 ^4 I! E1 I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 `: i5 d9 ~9 X9 }' I% `' C
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ d! ?8 C" q. B6 \" ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 _: X' Z$ E g! ~8 ECCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 F: p, `6 z: p& n1 w
positive for the year-do-date, including high yield.
2 b: x* H/ _" u3 K) w1 \ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( S% p) [* ^0 X) _
finding financing.
S" G2 n* B2 {- Q: o, X& V2 Z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 G+ w" V3 B T4 k; H U) Y3 s* A
were subsequently repriced and placed. In the fall, there will be more deals.
; g3 G3 U2 ~5 K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. t6 q4 P% D1 lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* V9 y& ?: x+ Q& T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 m+ Z' b; W/ m* f) i
bankruptcy, they already have debt financing in place.. N h/ U/ L! a; }
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% s% j+ t6 C) E+ {: [% r) l$ f: |
today.$ e# z& V+ f- C
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 U9 J l) W6 q4 `
emerging markets have no problem with funding. |
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