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发表于 2011-9-17 13:16
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Current situation; V0 L8 j3 X+ A# E) X3 l' A: Q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# X$ |% h/ l* C& {1 l- O+ s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; k& J+ ~8 z( k1 u% H3 k+ {
impose liquidation values.1 E8 B0 a+ y$ i; ~+ m
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 Q! ]& i0 K; g, kAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 t+ R3 Q3 [0 h: @4 j- ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 S# h2 w- O5 f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
$ k) j$ ~+ {5 C ]1 S* n, h9 r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 `9 W8 P' m# s! G ISeptember. Non-financial investment grade is the new safe haven.
) V. |3 J2 m z3 o$ D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ M! N$ W/ J/ m8 d/ Fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( q/ u6 A, V1 Y9 Z* X! o9 L
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" k# U( { ~ U) H" Saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' P8 n+ G5 H3 Z8 f' \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- n* s, F; \# S2 dpositive for the year-do-date, including high yield.
% ?' W1 w' T" ?- F$ R3 B6 c' ^ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 v4 b: U* b2 ^1 X' A( pfinding financing.
* F! D" }- A, {6 ^( [ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. x2 I0 `" H3 T6 L# B: V, h0 Pwere subsequently repriced and placed. In the fall, there will be more deals.
6 @6 P& u0 L# g' e8 e6 y8 Z9 ]3 f Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 z& A) c1 J1 R' X, p3 Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 f4 {; @5 a! K* Q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 V3 f n, Y4 b: W- `$ A
bankruptcy, they already have debt financing in place.; z- e0 B' @ [6 x8 ]9 c
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 v4 H/ N6 w+ a i, a
today.
2 N U p; e+ i. r5 Q6 P+ o5 i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in D! N, O3 p8 ? u T
emerging markets have no problem with funding. |
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