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发表于 2011-9-17 13:16
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Current situation
6 v: {0 i6 a7 ?2 X! n5 c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; e1 ?! S& F% {" Q" ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 F# q9 @7 j8 R4 t) v/ `4 ~* kimpose liquidation values.
: k+ s! n( [. R% k0 v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& F- q4 R' A2 b' TAugust, we said a credit shutdown was unlikely – we continue to hold that view./ W f6 \. m1 [( \9 P5 H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& B# d$ c) B3 s9 D4 iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
7 s3 V0 f9 K( C }" G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 w0 R0 m8 ^& }$ JSeptember. Non-financial investment grade is the new safe haven.
$ V* l( @! i6 G/ q( z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 r3 B2 K) N) {: @) ^+ I, l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! K/ d" y* w/ Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" c# n% y3 Z! @/ s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
u4 n2 |* v9 z; y- T1 h- R" S6 hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: W4 W; ?7 O" Z6 h% ?: n3 n# E L
positive for the year-do-date, including high yield.
" p/ U5 R3 Y! h8 ^ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- o5 i) x6 n8 D9 A
finding financing.
G, ]/ R! G, g7 s2 T( n ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 Q- v* k. C% X2 M8 u5 Uwere subsequently repriced and placed. In the fall, there will be more deals.0 c5 d& E% _" }7 u @- r5 b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 r) o$ ]$ p+ H6 e3 Z2 Uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. {/ T L1 d; {) B" {
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ i6 c; F+ Z- bbankruptcy, they already have debt financing in place. r9 B" |$ c* L+ b/ W
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) w5 W. n/ v! y' ^3 n6 @today.& n8 X" q, w* ] X! V/ i+ Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 h7 g- Z3 m! {6 T$ y7 T; z m7 \emerging markets have no problem with funding. |
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