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发表于 2011-9-17 13:16
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Current situation. { {& i! y5 c2 A5 L! v8 u, N5 S
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 o! E# \) q/ y/ A, P; m. b: V9 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, j7 N$ y+ ]; g. [! Mimpose liquidation values.
1 l# @3 E/ @; K7 f( m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- s3 B6 c! a9 E# C: o# S W
August, we said a credit shutdown was unlikely – we continue to hold that view.
3 Y% j; a R6 [9 C, P/ ]& y5 n The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; C% D/ U4 v" _2 a* V ]
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
6 o: W& W7 K$ J$ h
1 Z: l3 d8 h% J7 sA look at credit markets
6 b* I6 Q: y, j3 G$ h# Z6 Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% B6 C, W" I' P0 `9 {
September. Non-financial investment grade is the new safe haven.' I1 \/ l; m1 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ S- v' }( x" Q% l9 d tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! v: _$ e/ A8 Q4 Z$ S/ B1 w
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ `7 t8 X; P2 N0 O& U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% {' A' ~. I4 I$ r* c4 O! c8 nCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 z8 a0 C" H) y) Qpositive for the year-do-date, including high yield. g! n; Q; o% y+ o! z1 Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' g% ]1 T; K0 v) m
finding financing.
5 B0 e! O+ a& G1 ~8 f u, W Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 ]% B2 h# o8 h8 g: jwere subsequently repriced and placed. In the fall, there will be more deals. l* d) }- h ~. m2 p3 n( d* m8 v& E
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; K( P* q% C. z, P: P
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 p0 l, F6 X7 [ agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. n5 m4 P3 m8 R% y' g1 ^+ o4 ]2 F
bankruptcy, they already have debt financing in place.- b! g0 v5 Z. m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; v6 [0 K3 K3 y+ Y6 i Ctoday.
" \: r" K* V& F7 ^/ B Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 O$ s: P" V7 m A. K" T4 S* @emerging markets have no problem with funding. |
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