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发表于 2011-9-17 13:16
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Current situation5 ?9 r3 X# L# f7 k6 d0 z! l1 p
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' E& ]8 j8 d) L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 f1 v7 r8 E; z: L0 C' C: M& B
impose liquidation values.
, w7 I9 }$ [/ Q3 u0 k: b% p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 r6 W, V6 a" I
August, we said a credit shutdown was unlikely – we continue to hold that view.) _0 @8 B% l8 e/ r
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 Z+ S& {- I+ N) c s0 xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# ]8 S" m' v5 v
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A look at credit markets
, c2 E8 a6 D: m+ R }, r0 }1 l Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ `3 A9 {# } y/ u1 I1 F0 Y
September. Non-financial investment grade is the new safe haven.6 }- ^, g+ N! y s7 n L7 h
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 }. C5 B5 B5 _+ q' J
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ |- F- V+ @& N7 I3 [3 H; ^( n6 B ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have O3 Z# a1 \* s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( K- p( c) Q/ rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ e1 z9 h: m+ R( q0 j9 X bpositive for the year-do-date, including high yield.
: S3 Y2 h- z) c2 M6 a4 u3 r S Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. p) C' Y9 q+ `& M2 N0 D
finding financing.
* E. d& J. l" U# R# f7 T, r6 M: c Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 R8 \$ [- |0 L# L& \7 [8 }8 _
were subsequently repriced and placed. In the fall, there will be more deals.
1 f. P6 @0 n4 W' P( S1 X Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 Y( j% Z" _, C/ ]1 N
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ i0 t+ g, ], w( |- Q1 L( o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 Y: g; {) D. M6 ^, R W
bankruptcy, they already have debt financing in place." C: @4 d( ~4 _# e& |2 b5 b( S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, h0 M4 M+ b' r8 n) qtoday.& p4 Q6 K1 P( i2 G/ f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 s/ ]2 {, t! p; E7 T; Y0 V! vemerging markets have no problem with funding. |
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