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发表于 2011-9-17 13:16
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Current situation
) |2 t- m' I# Y4 G& m1 N/ a The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 E0 j9 Z7 A& u$ M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" h9 g* V E6 G6 D6 g: `
impose liquidation values.! l* d- p( M( `) }2 W9 P3 _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& c, R, v! P7 s# q- K9 M. x, M$ }August, we said a credit shutdown was unlikely – we continue to hold that view./ a4 D1 \9 C- h% Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
h' [+ a3 ~" H+ Y( Rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: C! G# T N! m* q, U
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A look at credit markets. X6 [4 V5 X+ q/ b4 m; D/ F& m' l
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 D- R, {0 x+ E* f+ C% KSeptember. Non-financial investment grade is the new safe haven.
( Z! ?4 \( z4 V High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" A0 C5 v; u9 j/ d2 u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 Z7 ~9 H# z' ^2 x7 L& vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( g6 I% e& m( v; w1 Q$ Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( }8 w! K3 I3 a: a# f4 n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) t! [! ]1 m/ @9 i3 @' \: ^positive for the year-do-date, including high yield.0 n; h! ?4 a8 k9 O# }
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 [: [( w! f6 wfinding financing.2 V( {4 X! O: V4 m! Z) {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 D" ?" H, K) u0 ]6 n7 j! Lwere subsequently repriced and placed. In the fall, there will be more deals.
6 o) Y9 s! m. Y. M& }, a6 \! h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. v! l8 Q/ X( a1 X' Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( J4 y8 Y* ]4 X6 e7 W0 x& V. C, K6 Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( d1 O& K- o# z0 M z/ ]bankruptcy, they already have debt financing in place.+ [$ l# |7 C5 N( o |) q/ v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" m; o5 V, x; y+ Y5 \+ y! x+ Atoday.
# L% J1 o# Z% t0 w# s! }- h) f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, H$ \ h* t9 b' T& x; _3 [
emerging markets have no problem with funding. |
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