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发表于 2011-9-17 13:16
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Current situation
! ^7 v* {. g6 d1 E" C The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* K/ Q2 W0 m# o# z9 L# Xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% ^* D5 y6 H H* B& A) U0 o0 Y
impose liquidation values.
/ T0 K& V0 K- X0 y- p4 d2 T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; x: ~8 }5 N5 V, D% r6 [August, we said a credit shutdown was unlikely – we continue to hold that view.$ W2 X$ j% H1 F/ K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) l7 N% L8 f, C: y( d. p4 @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets! d( x4 v) A5 R. K6 O+ I6 S' Z! B* \
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in& W' L: g9 O7 A6 v; ^/ v
September. Non-financial investment grade is the new safe haven.
$ Q4 i( o& @) @8 f% Q1 N High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 p6 E- I& v$ M" }! o. I" W
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. l) J- ~4 d/ d8 q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" O: s6 x2 n: L' C! d$ x: u
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 J' X4 L$ M6 N. l: U+ }
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- z0 k' I9 n( ^0 W0 e
positive for the year-do-date, including high yield.
! F0 n* |, v5 ]* z" e+ @% z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 a; G9 g" C/ Y6 `) j
finding financing.
1 I- R3 I3 k3 J1 H, `% o3 I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 S; ~7 s O6 k$ [6 u# o/ U9 E
were subsequently repriced and placed. In the fall, there will be more deals.. p. v8 t) N' O/ G5 P9 D H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 Q! Q+ Z- g6 ]9 C, {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were w: e# g, R- M# |5 u7 n/ A8 r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& f1 v$ D* q$ {+ p" Hbankruptcy, they already have debt financing in place.6 W& q1 t) W }% e1 B
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% O) p. A: |. S1 ] @7 ~+ e
today.! u$ l6 o2 b. u# L
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 D, S! L. v) [% H3 c/ X
emerging markets have no problem with funding. |
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