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发表于 2011-9-17 13:16
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Current situation) y6 {" |: O- o4 e! \6 {
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# Z3 H5 b) n6 y3 R, k) has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 p2 L" L! j- N- u1 Z
impose liquidation values.
$ y# B: z* h( \2 q: d In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" q- ^9 x& y/ b5 |9 @: b, cAugust, we said a credit shutdown was unlikely – we continue to hold that view.
- j+ Z" Y3 e% y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, P1 \8 w8 n1 Mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. h. @8 v+ ?# o/ ]6 C
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A look at credit markets" f: ^! K$ X0 ` c1 \
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 w* U, I; R$ M& l
September. Non-financial investment grade is the new safe haven.4 b) o' h" j* H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 A# V& {; c7 |( ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" P; @) w- u+ `' O+ L! [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ y) M& I4 U% S5 Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, l- A! g' q% l
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# t4 R% P% p# Kpositive for the year-do-date, including high yield.: E y0 d5 R. }+ _: m; P9 _+ Z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble) D6 I% r% H* L' [' z( M# H4 u
finding financing.
( k' O" w4 v% e# J& a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 Q: d/ Q( J6 ywere subsequently repriced and placed. In the fall, there will be more deals.
6 a& C# \) U1 }, t5 v Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 s* _ \- G7 g* y `3 o# iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, P6 S% Q3 W9 J. W5 @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 M" q1 j: F6 p$ x, ebankruptcy, they already have debt financing in place.; C8 O6 S: A8 ] t. e
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! m, r. E) P- S( e4 P
today.3 M; r6 _9 a# a* u2 r. ^" ~
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ s' _0 [) n M' L
emerging markets have no problem with funding. |
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