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发表于 2011-9-17 13:16
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Current situation- [1 l4 p- d! j% x9 N! {. G
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) W8 n: G) W! n7 X, {% ~3 r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may ~, w% D) \8 U& c$ e
impose liquidation values.% d9 ]: b* g2 H: d- w
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 ]; F" d) R( @7 ~8 _2 @
August, we said a credit shutdown was unlikely – we continue to hold that view.: m6 [* f* ]- i* Y5 X: w0 H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 J* ?. E5 X) \2 T" t2 L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# T) F! Z0 I2 W
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A look at credit markets
! w" C4 E8 u6 G( [) N Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! ?- s! X% o" `+ k5 z1 L; I. c1 ^/ F
September. Non-financial investment grade is the new safe haven.; l! e0 F& J" E7 O) a( d/ M ^2 U4 Z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 |' G5 X& }9 J. _; e# r% V+ s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $13 b( u; f ^1 _7 u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 f& U( a6 n) e/ D z$ A
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ S* [$ g3 c' p' I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 F9 _2 S7 G/ ^2 T" x# t( y
positive for the year-do-date, including high yield.# ?/ _: I. S! k( Z6 c- D0 l3 M( W
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- d% s: i# [& `# y+ cfinding financing.
+ O" V# b# [7 O" d Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. C: |: ~% ^! `4 i7 a) j1 y: ]
were subsequently repriced and placed. In the fall, there will be more deals.
0 U4 i2 P$ \" I8 S3 M/ S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 p, r7 p. H+ K. _# Z0 e& L8 ]+ _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' ^: v+ \5 F3 Igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 J; {- N) M5 S: |* q4 o
bankruptcy, they already have debt financing in place.
8 C! d$ R; {& m& c$ N European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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+ q. n7 t M* e% G) q2 N. b Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: P4 n$ y( t4 w p& G# c1 R
emerging markets have no problem with funding. |
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