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发表于 2011-9-17 13:16
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Current situation
& W& P W) p5 L7 u# q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 c- |' T8 h- r' s) ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: A6 L/ e6 [) x$ g7 n+ w* L) |
impose liquidation values." P& }8 T' m" P) V+ b! l8 b
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, e: h) M" p; _/ B$ Q2 ^" mAugust, we said a credit shutdown was unlikely – we continue to hold that view.. n/ Z& B! u- ^ ]/ E! _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' D0 G7 a' Q: \ S0 u" Sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. v9 {9 _, \* K$ n5 ~5 b/ SA look at credit markets& e! _) ?! a* k i) C& H3 `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 Y/ D* U+ W+ [: h5 l% N
September. Non-financial investment grade is the new safe haven.* e4 V# U$ Y& L6 H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
# E+ Z1 J* S) f2 c( uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; l* w! _7 C9 d* A0 h* I
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% G' T: `: s' U* |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 g4 T4 g. n/ r# ?
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" M( h3 f. m; t; }7 k( ?$ B
positive for the year-do-date, including high yield.
/ K, ^, [8 N9 s7 w' g0 c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 [7 X* |$ I6 d- b% ]% H
finding financing.
9 \ [" a8 L, h. ?- g) g% x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ Z5 l; n6 i: W1 S0 C7 G5 c1 Z% zwere subsequently repriced and placed. In the fall, there will be more deals.- x$ r- o- q' V( W9 f, X, z% ?7 K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& `( S' ?& k9 \0 d
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; w& X4 I( M# f" i+ P3 Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ ]8 ~5 Z/ U/ {7 E3 a) }
bankruptcy, they already have debt financing in place.$ B' D/ {, s3 @, t) o+ t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 g8 k' ]% Y) O% o
today.( X% r) b4 y0 I4 G8 u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 g0 Q+ s8 ^; D5 ~1 L" W
emerging markets have no problem with funding. |
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