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发表于 2011-9-17 13:16
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Current situation- g4 |3 Z$ a# r8 C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, Q8 c; p! M% N: j& Y& G* v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 _3 t c; g" c! _# G1 o5 Timpose liquidation values.# K2 d/ }- [. I/ a t6 U: V; N0 S
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- B R8 b* G4 @
August, we said a credit shutdown was unlikely – we continue to hold that view.
. e5 ^& t; ?' \) i" v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 x" r0 `. ?1 l, [) q* c; dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 u/ _ `# F# s4 F* q+ X! RA look at credit markets
7 l$ w" m/ K5 q: W9 u Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 {/ @6 \. D9 g' j, T9 MSeptember. Non-financial investment grade is the new safe haven. o3 X' i2 a- ]2 I) R
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. f3 V+ u+ ^# _/ P3 x8 g5 S/ Dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) I# ?3 e: P* B {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* n5 M5 t% m& k1 n. n7 s1 @# ?# }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: N3 F9 ?9 q& A: E% r& B& F4 I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 |7 w* P6 C9 P* @3 ?
positive for the year-do-date, including high yield.: W/ P- [8 w1 e3 B: f9 w+ [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% W) a& q q' s& t7 y/ b! ]
finding financing.2 [7 W0 E% S c/ i2 o8 A
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* w' w: n7 K) ^# rwere subsequently repriced and placed. In the fall, there will be more deals.
; z3 f' C+ ^! B4 D' i Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& T7 g% }, `, D/ M2 i' J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ U2 F7 h+ e6 c9 f8 |( p* x2 |+ h. vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 S, l+ d5 `0 G/ h/ J: X% c8 W+ e2 cbankruptcy, they already have debt financing in place.
) W% p3 z3 H+ k2 @" c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% d9 G7 x% t" A. Z1 _today.! a9 I6 d0 Q- C( ~6 R9 E- b: w- S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 c( h& }7 N: q W5 g1 Uemerging markets have no problem with funding. |
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