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发表于 2011-9-17 13:16
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Current situation/ A+ p0 q# \) ]$ z; K
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 I! h% d# P8 j1 u
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. z2 v1 Y7 D) e6 Y* @: h6 V) M jimpose liquidation values.5 b4 m" k' k) W" N$ z# F
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* x0 z; w* e. u( A. OAugust, we said a credit shutdown was unlikely – we continue to hold that view.2 x- D" T) i! ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! z2 j" O) ^) M; c. G1 j1 f! S
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. b A! U: C0 [. F- M/ v
* O |$ a8 I/ c
A look at credit markets
5 @5 X$ G( g+ @1 H" G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in _; d" H2 p$ u- I( J* x; n! n' f
September. Non-financial investment grade is the new safe haven., }9 o' l/ m# Z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" v$ l, h# |3 B+ i4 S' l) i
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 u. L+ l$ r! g8 a- T z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" l; l- d" E% eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) d' |: u6 r; q; A7 ]CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ ~3 D& ]& |: h" e3 w5 b: e3 Cpositive for the year-do-date, including high yield.
) u: y+ w% v. q# y' Y+ N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble q2 ^% q1 L0 w- \3 a1 ]
finding financing.' O9 W$ Y' y/ U0 Y1 O+ x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: H0 | Q4 V! ?# M. xwere subsequently repriced and placed. In the fall, there will be more deals.
4 @( O- R0 H; Z# s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% W9 s" ]5 \! V; G# r. _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' n4 q: E! L# T# Ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# L: N# K' x2 s; C' obankruptcy, they already have debt financing in place.
% y( J0 w4 h2 J" o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 L; u6 q4 h" o+ \4 l0 N/ Ytoday.
, O, b5 c1 S# N! t6 W% h3 f! ^. z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% p# B# q+ M9 R" e: Z! qemerging markets have no problem with funding. |
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