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发表于 2011-9-17 13:16
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Current situation6 q/ X+ f# X8 J+ R5 K! v8 c$ _+ l
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! r3 }) M0 H( Z0 Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, m5 U1 v2 z8 l& x' Aimpose liquidation values.
0 f" O4 i0 Z$ Q3 z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& X, \( |# t5 v8 A3 `* j
August, we said a credit shutdown was unlikely – we continue to hold that view.5 Q3 P% n K+ Y5 G+ N: l0 Z* l3 Y6 l
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( q2 W, N* M7 @( Iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ ~& T3 x4 q' G4 j5 p
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A look at credit markets
: x0 T. \. s& V. r, m% L* L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, `# e/ e9 y+ @/ r- e
September. Non-financial investment grade is the new safe haven.
1 X6 D1 A1 `: j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' h% a4 ]3 V% q6 @# F4 fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. w0 {4 Q8 O/ }# ?" c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" E+ ]1 Q+ t% l. f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ J2 W# ?0 H# c
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 K- x& h) O) N0 D! H
positive for the year-do-date, including high yield.+ L4 ]- Z+ d" b
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 p3 `/ }1 A& L4 U6 Y+ \finding financing.% @. j# T5 @) m' i) R* z5 q) I7 N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 x4 J' h; _% T& o" ?# jwere subsequently repriced and placed. In the fall, there will be more deals.
" E! c0 O3 _- C( E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) @& j( l2 b. p7 M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 t4 ]. Z; B) C7 [- S3 ~" ^$ E: mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- U) S6 w7 g/ p' Pbankruptcy, they already have debt financing in place.' D6 r' ]2 c" A- ^2 M D
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
\, R# D j5 v Q" {& ]3 O9 w" W! T' y& }today.
e4 K* W) h% A6 M, j Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' j; F8 Q t2 l
emerging markets have no problem with funding. |
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