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发表于 2011-9-17 13:16
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Current situation+ ]9 Q' k# U6 T$ J2 V8 y
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' }7 w& _7 a1 U' n& cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 F/ l1 i4 T0 t0 x/ w& ^8 b% Kimpose liquidation values.9 Z* s$ ]* v( E9 u% c } k0 L4 R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# s( b K3 j+ ]August, we said a credit shutdown was unlikely – we continue to hold that view.5 f6 d; U# w+ M! }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" N4 a1 M# w# ] ]) t+ S4 A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 Z8 N! A, t1 T$ _
) |' W! j* o( z, g7 @A look at credit markets
$ ~9 o4 @- L' B: W& ]% K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 R- M( [: m( y
September. Non-financial investment grade is the new safe haven.
" W8 p' G! p! f3 l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 Q& ^8 O" n$ n: _) C$ gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( ]' o: s, }$ _1 a" Z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 U: q9 x, t9 f: H- U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 ~3 C# A5 i! M b
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# X v X& K, Z9 K2 w X5 ?
positive for the year-do-date, including high yield." \7 r. }8 M8 Q/ Z: T( w: C$ w3 u1 W
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 g) s: a4 p/ d) h: {
finding financing.
; t5 \/ e4 O" r0 p6 M Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, J5 x- y0 J7 L; {were subsequently repriced and placed. In the fall, there will be more deals.0 k; w2 y5 e! N" y# i' w$ d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. T4 I% s* }: F. h. _7 iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 R$ Z- Z" c! A8 J( T$ [; u; W
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
B/ x* _! ?. `bankruptcy, they already have debt financing in place.
; }+ i4 f. M9 Z; |" k European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 z; z% b& Q; g v) h8 ktoday.
/ G* l4 l1 R! s8 O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 W+ N4 x# P3 I1 i
emerging markets have no problem with funding. |
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