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发表于 2011-9-17 13:16
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Current situation
6 n0 r) y O1 |) g4 K6 ~, w The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 J7 D- H9 c; {& L" D3 U0 Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* ?/ v5 d0 _' aimpose liquidation values., u9 Y# ]% n1 g+ O
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 B3 P) H# W4 F- b
August, we said a credit shutdown was unlikely – we continue to hold that view. \8 g4 I Q3 K* X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* k2 p j& y5 Y3 }* tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets" F, _) }8 D2 g% N' f9 l
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: c/ Q: N3 V" y
September. Non-financial investment grade is the new safe haven.
$ u, r" H- h/ g3 B; l7 A- N8 u High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% B: @! i* j* \2 \8 b" Q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( f. X' }2 h: a: w# {8 H3 I* L4 c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 W: C6 b/ _3 Z: l8 L+ v: d+ }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% W3 X1 L* H9 @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 W' l0 j4 _* u) r+ Z, _+ H# p
positive for the year-do-date, including high yield.5 j0 p- c; [# x# S. P8 p, v2 Q1 O
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ u' V# t$ z: E' K1 jfinding financing.
2 c0 x: e4 K( E, c1 W( U+ X4 a- \6 d1 ^& v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 `; R; k A% W( H i- b' p
were subsequently repriced and placed. In the fall, there will be more deals.( l$ ~5 P: b* @- ^, M
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 U4 w: }! h2 p' k$ kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% m+ g7 d4 M0 u8 O5 h4 ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( f" `8 v1 }( g5 f( Lbankruptcy, they already have debt financing in place.. H# H; N: _' @0 I$ p( d) C. R1 Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 Y ?# \; Y) @
today.
$ s3 V7 T5 z1 ?$ h. v Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 \" H- H! Y6 Y3 F! U! m! w* g) Xemerging markets have no problem with funding. |
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