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发表于 2011-9-17 13:16
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Current situation
1 d, N$ s: i* x" r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
i% x( l" [; F. sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( P! `$ ~3 C+ [; M/ Himpose liquidation values.# `2 Q" D a/ b d$ {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ G6 I6 h3 H" k/ {# ~+ ^/ k
August, we said a credit shutdown was unlikely – we continue to hold that view.$ ]- z2 E) f; j+ U( S U7 l
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% ~0 w* X5 h$ `+ q" H$ O* s2 b. G) T
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 C h( I! C! O' z9 ?9 v& t
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A look at credit markets
p- `+ L; x2 R x Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in& T, B0 p6 A. `7 ]# ~
September. Non-financial investment grade is the new safe haven.+ {! S5 X& {( o: h5 x4 v$ E% B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, C# d' l4 Y+ k8 Z; Jthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 j% J, o0 o2 z/ H% c' v# Wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; y( Z0 |/ P/ b& i# C( |access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. m4 M' U D$ E# i9 s4 L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' X! t7 r$ q1 Q1 r$ t4 q
positive for the year-do-date, including high yield.+ @$ f9 d$ _3 |! Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; j" ]$ k L+ q# M+ |; `
finding financing., w8 d- S( T7 X
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& ~! V! }" M: r0 }4 Nwere subsequently repriced and placed. In the fall, there will be more deals.
/ C' L( E5 J( @5 G* |& ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
}1 A& D4 D( _7 W5 H8 |) k, Gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' Y+ W" s. Q% g2 [3 |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 Y" S( a( m$ q- ~6 D( o% c/ i
bankruptcy, they already have debt financing in place.
- t$ [+ M8 g. d% O9 m4 Q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 b0 E& g3 l% L6 }9 b3 j6 ~+ v& D
today.2 S0 [2 z. d8 ~% w% s- ], C Q% v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& ^. s! v9 |8 v; D: N9 P9 Nemerging markets have no problem with funding. |
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