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发表于 2011-9-17 13:16
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Current situation
$ N. Q% u5 J0 L& _) q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 @: R% ~2 A4 w3 @2 }( Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; u+ R. ^4 F5 P, r
impose liquidation values.- V( K) r) Q I- U4 \
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 q( d& M E4 W% x- y j1 R w; sAugust, we said a credit shutdown was unlikely – we continue to hold that view.; F3 V8 u! M) g& ]( b/ S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: X- D d p# @4 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets( E8 }) s% }+ z4 I. D. O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# e1 J' |; \5 Y) F& S/ u$ D( p* i& O
September. Non-financial investment grade is the new safe haven.
: P* Y) t9 L0 d( G" d' Q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- x) e* X, b" L9 y: lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! n- D. X* Q) Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have N( m1 K' ~$ H3 ?1 l
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ [6 ^6 |( x! A# U: h" W
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are I W |9 L* h$ A9 P) ]+ i
positive for the year-do-date, including high yield.2 E+ O: i r* h( R; S0 y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) ^) i2 c& o+ C7 B! j( o4 xfinding financing.
! M7 B6 c3 m* r9 p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& O" ~1 q, X0 {7 [( w/ M2 B8 Z) Ywere subsequently repriced and placed. In the fall, there will be more deals.- S7 E% n# i L: H8 D' U; F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* t' A) M+ {8 k$ D& P; bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 z0 j( [' W [5 E) c2 P7 _
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; U0 X' c, I- y7 p/ i/ Z6 _1 n0 W
bankruptcy, they already have debt financing in place.% o: j9 F. @' Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- c \! e/ m- |! `5 E
today.- |( ^3 D' S5 Q7 s- g* [8 V; s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: j, M: b$ d, V' S3 P. s( wemerging markets have no problem with funding. |
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