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发表于 2011-9-17 13:16
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Current situation) Y4 q2 ]! V# l9 u/ X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 x/ b) c2 l& u# |: g! r% m" p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' w* g( `$ G: M) o! x, d4 u, C
impose liquidation values.$ Q1 |* |, S1 O/ ^2 |9 @* m6 z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! H" C( ~/ s9 t; N5 _. h5 _4 bAugust, we said a credit shutdown was unlikely – we continue to hold that view.: n% y6 m3 @* Z4 f
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% n0 |3 j! G8 ^% Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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8 Y/ ^+ s- t1 i3 |5 rA look at credit markets
3 [: f. R0 s# J& f5 O4 P2 m Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 G) o; ~7 [0 F- TSeptember. Non-financial investment grade is the new safe haven.1 T% t3 M( R7 N/ @; A: ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 z1 K9 z% l+ I0 ]5 \: b8 [then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ U0 R6 e* T* A H/ Sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
~) x# i4 E! ]- j% j, jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 }( q. J7 ^2 D( ]: ^: W A' c
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# i& |) [3 V T2 L9 dpositive for the year-do-date, including high yield." j5 ]' n" r* n9 c
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 o0 h: T6 `0 S( \0 W# J: j. O4 v9 M
finding financing.: c, ^9 e4 b( _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: @+ Z* T `, `3 q; Q* {! s# ewere subsequently repriced and placed. In the fall, there will be more deals.3 L- f- B! V. z! I5 V
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* T& t( e# q) [1 A
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ r- D$ i% W( P1 e- q- b, [& dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 I( {- A5 j" x. ]bankruptcy, they already have debt financing in place.( S- P3 T, @! ?) }
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 w& R! C- v9 V S( M! ztoday.
! S) d0 I, _; R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, h" F+ C! S! p2 Z
emerging markets have no problem with funding. |
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