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发表于 2011-9-17 13:16
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Current situation
3 B8 H9 m" C2 w: I5 h* [- w The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- d W4 C7 i0 i0 L6 j$ o4 ]- a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% ^1 `* e4 y. g0 simpose liquidation values.
% }, b4 N& `% l! q _ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 y, G# r* e t* u5 M7 KAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* Z6 v8 A* Z, O5 D4 F' T) B( C The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 B$ D% C0 Q1 t# k) I$ V! Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
- E& \ o1 l5 X6 y7 ~, Z: Q3 J0 m9 K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& D: U( A+ c/ K: t! s& uSeptember. Non-financial investment grade is the new safe haven.+ E( Z: o4 S' ^8 ^4 C" T* S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 k$ s' K' Y/ Q/ c* f1 L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. W) }+ M9 V$ J! M) P! O! ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. V& [+ z @3 [7 u1 B: f" F/ D% a
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ q$ D! b$ ?* J# h
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, Z" L( `! G- P: E r7 i
positive for the year-do-date, including high yield.
2 A' p/ c6 d1 w# w4 N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# F8 k+ ?/ ?# J7 H- J% w7 o
finding financing." y9 e( j3 N2 h3 S, ~9 B8 p! r+ `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 ]) i% A9 @. @: A1 a6 }were subsequently repriced and placed. In the fall, there will be more deals.% {, J+ V5 I8 K/ x& B. [% ]
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ |" Y' J9 W8 }: ^, U& Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' |/ O# Q( C ]% G- Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 q) k X4 A6 l- }6 b9 Y
bankruptcy, they already have debt financing in place.7 F" @! X* `9 c$ R* Q8 Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 ?5 i& u, Q0 ^. a, @( X9 v$ Ttoday.
3 B' p4 m1 C! F9 C Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% D: _/ g& v! v+ h* {* @% femerging markets have no problem with funding. |
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