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发表于 2011-9-17 13:16
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Current situation" K7 g; e3 \6 M8 T# h# c* A% @3 T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 U; S4 f7 @; ]( pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% ?! n+ n. l* M. U3 ?impose liquidation values.' q! \- }7 P& y, P# m2 q% u* w x
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 F/ X3 H6 R3 U* M. O9 N+ g- l" x
August, we said a credit shutdown was unlikely – we continue to hold that view. u& g' [# H- m. l+ j2 i$ d; a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( }: m+ l1 {) V& \7 `7 k- s5 ~7 u
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. q4 t" u4 p' D9 \
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A look at credit markets' d( S1 s3 f$ y6 E
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: y, \5 p3 F9 c( y% Z4 D" c8 c
September. Non-financial investment grade is the new safe haven.
# [0 g/ ?& l+ Y! u) J; Y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* O( U( [& w! h/ p2 J& u) R T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% h: B1 ?% f: x" k! N
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ \* B9 m& @7 D; saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& X" _# E9 v* m- [9 F
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 N) W, l3 t8 z+ @+ apositive for the year-do-date, including high yield. [3 s7 P1 D7 S$ [" z' Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 }, Y. l; q1 f5 n C1 X' R8 p4 h6 W6 hfinding financing./ g5 c$ ?5 ]7 W( c) H6 S
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! W, e! j4 b4 p9 L+ k
were subsequently repriced and placed. In the fall, there will be more deals.
- k# N+ G/ `! v1 F) A' y1 _, s( C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 z, Q, p, d6 O' ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 R. y* ~! ~7 |* X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 J6 W* b1 s4 o- Q# Wbankruptcy, they already have debt financing in place.
7 t- {4 P9 H: U$ F# X$ k! ` European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 m0 z5 o+ u: V/ Itoday.
$ j8 C* T+ O- A: U. {* m4 h# S Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 N- h: J0 }: s* Q. b
emerging markets have no problem with funding. |
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