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发表于 2011-9-17 13:16
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Current situation; q, U) D5 J C! j6 B3 o W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) U+ q* k2 ?2 x5 Z! W. X7 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# a1 y9 g: D# `- Q# E
impose liquidation values.1 E0 V/ [' J$ r5 G: V
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 L9 x" H' W/ [6 n' fAugust, we said a credit shutdown was unlikely – we continue to hold that view.) r/ ~6 i6 V$ l5 d5 e$ w
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- k, j% {+ Y1 @$ wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 c! W Y3 J7 r- }1 p. O: |
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A look at credit markets
, @$ T) d) J ^2 ]5 H; T& _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# r5 z5 h. y5 y zSeptember. Non-financial investment grade is the new safe haven.
! j, C4 p% M) M; d1 ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! N5 [+ z P& r( y& Y6 ~3 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $13 t+ k" p2 Q" O* e+ N E5 f
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( S% v2 p. Q/ W" z0 W- h; `/ L0 \access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ m& \) v! J) S3 m! c: m- k+ e# iCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& [( u4 u6 |8 a2 t1 G' epositive for the year-do-date, including high yield.
% m7 o7 P$ ]9 [9 D. T1 q% e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- S" @! O, f% V* G( Bfinding financing.
# t& t% S9 K8 m6 d# o Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( @0 b4 b% S; S3 k0 W1 F3 r/ vwere subsequently repriced and placed. In the fall, there will be more deals.
9 j9 V. O+ ]4 V; P; H Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 c& h k F* g' W$ a# ~$ z4 z$ b1 Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ j5 h& g$ f4 b1 t: r4 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 D$ y% {& b# C: A L+ _" {8 Q' D3 C( q
bankruptcy, they already have debt financing in place.
" E; b6 ^5 x! x0 {, O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ W4 o2 V; o+ S( B% w3 z& F
today. P: i& r3 }- t- z+ P: p5 ?
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 J. ]0 \+ h0 g$ n+ \emerging markets have no problem with funding. |
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