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发表于 2011-9-17 13:16
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Current situation
: [& O6 |, D8 B1 ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 o& o9 m# p6 ^4 \8 G4 w
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 z$ }, R" E. m( V% J% ~
impose liquidation values.1 t8 ]7 y' ]+ T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 ^8 N, k r J
August, we said a credit shutdown was unlikely – we continue to hold that view., b& O# ]: K. [4 }' D2 F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: [8 z3 }7 _5 Y3 W Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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6 t" U5 y% z( F% ?, r& ZA look at credit markets
. f2 }5 {+ E. ]% x( A2 ^: I4 i Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. h4 t! e3 }$ F+ p. ], a* n9 y: r0 Z
September. Non-financial investment grade is the new safe haven.
8 C0 _& _! q/ W4 ]7 L# [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 [. ?; A8 I4 [% q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! Q/ o1 j: _; W+ z- ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" K K6 j; F3 `/ d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 h- V! N. E. D+ t, s5 _; N$ eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" O' L/ P) U8 K7 i
positive for the year-do-date, including high yield.8 |+ e! A' u' s2 N1 X& L m' K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; L8 q) J8 t! D8 v8 |' W {3 K: Cfinding financing.
( d' f" S" b% z- B* D Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( b, Z: v) W5 K. x% z5 ^were subsequently repriced and placed. In the fall, there will be more deals.
9 i7 R* i+ D6 e0 f% p' i$ S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' j3 F# H1 T+ r! W
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 r2 G! f- N9 c! ~5 h
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 E# _( n9 }) s2 _- ]7 J! Ibankruptcy, they already have debt financing in place.
0 B; ]9 _4 t# P; K European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 c! |/ c! K. d5 [# P6 o. \
today., R# i/ C$ v2 Q5 i9 o) w* B- L% u6 r
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: c& s; I4 H. l/ p6 b
emerging markets have no problem with funding. |
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