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发表于 2011-9-17 13:16
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Current situation
T8 C3 v" O# L1 X9 t& ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 t4 Z) y4 Z5 l: e* O" {$ i2 \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! p0 Z% ~8 s- H* uimpose liquidation values.8 p1 T) ?) i+ f. P: A% r
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 T; g. U$ e- X
August, we said a credit shutdown was unlikely – we continue to hold that view.. y: B" \# `5 f# W7 m- P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 m; m( E% [7 P" kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets( @- ^# k; G, i! U+ p+ a8 J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 \3 }0 K: U ]' Z2 G+ K% s) R- q
September. Non-financial investment grade is the new safe haven.
8 J0 ]: y3 F/ J8 E4 P High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& q, @! u4 c; \, W
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; r, z# E1 ` ] E; j+ c$ o' T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 k+ V& v) y5 D3 {1 u: \6 R, T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" z) b. z( f- x$ d7 [+ {* K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% U6 W( Y& s) R. z* O6 G0 q6 k2 xpositive for the year-do-date, including high yield.- e$ J1 a) M3 J1 I
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( a. q$ c' F2 m' d( |finding financing.# H( F @* {# ~6 Z3 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 U' W, S( j& t8 O
were subsequently repriced and placed. In the fall, there will be more deals.
% ], Z/ E" r" v! @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 {( {3 p4 m/ P( w; X' x; c6 T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ v# }) \" Y& v: s: k$ t: I1 Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& n# ~& v! O7 H- Abankruptcy, they already have debt financing in place.
& Z0 q+ v7 ?1 s* o; ` European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 ]( E# h$ E" q% _today.! o' w7 u. C, h8 Z0 q2 q0 _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 Z/ l5 ~8 I9 U- }) t# w( A% Xemerging markets have no problem with funding. |
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