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发表于 2011-9-17 13:16
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Current situation" {% Q2 _- T; o. E, T! x7 [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 Z3 N @( D. [" w `% R
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" D5 A/ m1 O1 D/ j
impose liquidation values.
2 i8 Y6 P1 E7 |* Z3 t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 ]- ?5 `3 [* {. E& `
August, we said a credit shutdown was unlikely – we continue to hold that view., C8 i) z( u- i# j+ \, _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 @ `+ t. M7 ?: E; _6 ~* }+ {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
. A4 ^6 ^- A3 W- Y, N7 h1 g a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in g6 t7 L7 d& ]. h2 r2 G
September. Non-financial investment grade is the new safe haven.) A( z/ R; h, j" L" s! t( k r
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! K5 ~4 `8 S- t1 o+ gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 t: i+ P/ m) t4 Q/ Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 {$ s8 J' y1 v: @access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade p, X: b! F0 @: s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- `9 w% y- @ E5 Y1 Jpositive for the year-do-date, including high yield.
+ H# s8 I) S' l" V" C Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 H* ^6 q5 e' s% b
finding financing.
! _' k8 U; @# v6 ~& C8 T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; D0 t* Q7 x Y* N# D$ b( M+ [
were subsequently repriced and placed. In the fall, there will be more deals.
2 k- H7 m+ \% D& l3 r% L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, e6 W7 K3 C1 _: m5 b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ {2 ]. J' _) f/ ]# c4 j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 F$ a; |+ A; h6 M. X' l d
bankruptcy, they already have debt financing in place.' s8 u( ]( e& C2 ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 s% D$ s; v% Gtoday.0 T: A- ?3 i1 E* Q: s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, `3 y. w7 m+ S7 ^emerging markets have no problem with funding. |
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