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发表于 2011-9-17 13:16
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Current situation
8 h1 a9 `9 Z; X" ? X5 | The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 W# q4 w6 f" ^. Aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. E F: X V8 ~9 D# e3 ~
impose liquidation values.5 [3 n6 p2 F: l. E
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 e8 o, P; y5 E6 `
August, we said a credit shutdown was unlikely – we continue to hold that view.6 s/ g' `" w) P- |
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 }& V, q2 V" Q) w, Y0 c8 Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets8 s+ G* j9 R; B( t6 O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& x5 _( S$ a1 O |5 G X( @ aSeptember. Non-financial investment grade is the new safe haven.8 s( M) x$ \9 W Q' T, Q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 ?. ?% B/ Q1 E6 a2 m! x; [7 Z/ zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: _! U1 X; {' u' G. e8 p; ^. A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% ^! `3 p2 g! j/ w: x5 aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 y6 W" |% Z* f8 {" U. A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ ~; I( y1 V) @0 ^, C/ j$ t1 Opositive for the year-do-date, including high yield.
: P5 v2 U/ g: H7 G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 u9 |' }/ o0 ^* ^
finding financing.
2 m( ^0 b" b2 M/ ?( U8 M; ~ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. O: r. k2 B; _3 w6 y
were subsequently repriced and placed. In the fall, there will be more deals.7 O' @' z. V' A" i8 `6 b U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 T( l, X" e- Sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, v) g3 x% Z w( |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 a& ]5 O& D+ R" J5 L9 ~bankruptcy, they already have debt financing in place.0 W, `, G0 C( R K0 a/ n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 a/ a. i% @. ` ]today.
' c; b) W) b5 }4 l Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 R9 p% `7 ~4 U' E5 q% Qemerging markets have no problem with funding. |
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