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发表于 2011-9-17 13:16
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Current situation
7 G' `7 Q: ]% p( x) ~5 @; ?* i2 ~) F The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: c0 { d& H) K4 ^& n
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 q+ @9 e# u7 b0 w$ b; J6 mimpose liquidation values. _! J* y$ m7 L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 V' H$ t/ h$ r/ E& y( UAugust, we said a credit shutdown was unlikely – we continue to hold that view." r* q I; D; e9 @- m+ l# G
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, y- {5 ]+ C8 ~0 M) C* F, B- A. p
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 Y! P9 s; H0 ?( H8 R' A
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A look at credit markets
" @7 R9 t1 I; W9 G ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 o- M' C! S' b, j6 rSeptember. Non-financial investment grade is the new safe haven.
" d3 H" E! n: X6 [7 W High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- s' k( i+ T! C; z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 u' E- Y3 X8 j1 B6 S6 m7 D2 l
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! Y/ c2 u @7 ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 h0 R+ P9 j+ N: J4 H0 GCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- Y; z5 s5 T8 R) H" C u
positive for the year-do-date, including high yield.
$ i- L7 J8 S$ `9 x+ l- ?' x Mortgages – There is no funding for new construction, but existing quality properties are having no trouble u8 k; r. ]0 U9 L
finding financing.
0 {" O5 U$ J2 }. Q Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ I5 {! Z$ X! M9 `# w0 f( }
were subsequently repriced and placed. In the fall, there will be more deals.. O a! }( i" v% g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ R& G, w* w# p) D, |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 d' B& r5 k" U% S- Bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 N% K4 f1 P# h1 P$ U5 d' v
bankruptcy, they already have debt financing in place.5 A5 |6 {/ q1 S7 r& K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- C$ S4 l4 }; k9 e" x
emerging markets have no problem with funding. |
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