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发表于 2011-9-17 13:16
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Current situation
/ w0 r: S- D1 E6 f6 A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 g4 [- ], U8 j: g; ^& U
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! s# D9 s4 c8 n7 ]impose liquidation values.
& L& O# q+ f: e4 o( r In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! ]+ l8 }6 ~/ e2 k' P1 L. WAugust, we said a credit shutdown was unlikely – we continue to hold that view.
% }1 w; c9 O7 q8 c: X ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, S J! Q X) v* h
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ s: a. h* }. b! bA look at credit markets; g {' {+ ?/ W
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
+ M" g7 p4 V! R4 N, D9 |7 oSeptember. Non-financial investment grade is the new safe haven.
3 t5 L) p# f) _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' {6 v p$ T' H4 k, ^3 W' Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 p( J, K0 \/ G! [2 z$ Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. l0 B( m* q: m( s: T& b4 J" Raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" o R# a$ l. S! y2 u/ \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 v6 `6 K, r; Y4 I u
positive for the year-do-date, including high yield.1 Q) G5 v% j; \6 m
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, R8 |2 l# a6 b: u" }7 ]! I3 M- Nfinding financing.
$ A% e4 g& l7 K# b- E% L6 x* d* I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 x& S6 Q/ F; ^, B, A5 l/ H
were subsequently repriced and placed. In the fall, there will be more deals." r. @! u- d* _0 d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 |. L- C+ K5 d6 o# d
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, P. u. f( P3 @4 n1 |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ ~8 x. ^. m! Z0 j) j
bankruptcy, they already have debt financing in place.
4 D5 j- b4 j! y: I' Y# W7 g8 V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 g4 V# d( _, N) @9 |. p
today.7 w! e% n1 \1 L' o" T# w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 u( p+ |. q$ E# \' z
emerging markets have no problem with funding. |
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