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发表于 2011-9-17 13:16
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Current situation
* P$ S$ W& ?3 Q& @9 e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ S' \/ P7 V5 y* e, @as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' L' r9 W* L8 W1 G; v- e/ j2 `2 v
impose liquidation values.
# o# f- d2 a& Q# J& d In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ \1 e" E, {! o5 r' KAugust, we said a credit shutdown was unlikely – we continue to hold that view.& b' M( I0 \8 O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 Y# r5 e N& f, V3 E" ^6 t
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets# N$ b- D) O X) Y6 m
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, y" K; T' t. f0 C* y; D" I% @# ZSeptember. Non-financial investment grade is the new safe haven.4 p) J! X* R+ r W0 s, n6 A
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% e" Y* r4 W) ]* @( O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' n% i1 |) S- W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. V5 c, i' e1 B
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& m- U' z7 O; V7 B& j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 _2 h. X+ m, g! V0 D& Jpositive for the year-do-date, including high yield.3 M! A" l5 l6 q/ z% v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 l; s/ \$ u3 k1 b
finding financing.0 E! l* ?8 Q7 p" h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 |; ]' T9 ^6 g6 N' E7 ]8 Z0 r0 N) B
were subsequently repriced and placed. In the fall, there will be more deals.
- q1 ~. Z; I/ F) l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, N$ V& ^( w C2 o; v3 l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 N9 F, P% X l6 A. B! }& Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 T5 t" v2 L" {bankruptcy, they already have debt financing in place.; S7 Z- u9 ]6 `% d9 ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ ?7 e0 H3 v# Q7 Y
today.
) t: s: I2 |# ~0 v/ q" O4 S Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 Z1 h7 R U* a$ a* c
emerging markets have no problem with funding. |
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