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发表于 2011-9-17 13:16
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Current situation
e% z7 t. K! g; e% ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ y3 E& D1 |/ A& r" vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 r' J2 C5 j7 r0 p% a3 U
impose liquidation values.0 E6 r; f6 p. Q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& L6 [& G) B& l! w: IAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 N# x2 J4 F3 x" T! r. e1 a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 ?. {/ C9 Z' E9 y. Mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
; |- n& ]0 `5 z1 h% x- K0 z" J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 h( e3 w% {, K# T; HSeptember. Non-financial investment grade is the new safe haven. m2 _) S; m9 g# H6 i5 ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; a! h: N4 C% X1 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. I3 J/ m A1 {9 u$ H) [billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' s( ~5 }; i1 _7 `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) l( Q$ G! l/ VCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' Y: o' m! ?0 Y) S" ?" L6 A7 `
positive for the year-do-date, including high yield.
' F) ?6 V) o9 N6 E# ?% J* M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% F7 h6 q# c; O& o/ y
finding financing.( m- ^; S7 G) I2 [; C Q, s: }5 L% a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; `0 {; P3 p3 v# \! n# p
were subsequently repriced and placed. In the fall, there will be more deals.& `6 T$ o ?7 N: R* I8 o, @$ I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" A! t3 I; O9 ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 |$ N1 L$ x1 ~* Z0 }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% F _+ x8 a4 t2 X0 V! p
bankruptcy, they already have debt financing in place.& j) z" [+ ~ G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" K( t/ y5 N8 B7 W3 A6 d+ A
today.5 v# v2 V+ p8 E t! b+ l3 p
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' b" i y' G% }% J1 e+ femerging markets have no problem with funding. |
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