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发表于 2011-9-17 13:16
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Current situation; n9 x! K) B9 h* G9 [9 g' y: T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; E! \6 w i! K# V1 g' \# b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# v; ~$ f: D Q( d v nimpose liquidation values.
; h. I# C3 F% _; ^# v9 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: Q: F* W6 X3 k9 o
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ I. Y. b+ c \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 x* z. t7 A1 Tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
7 w& ~5 f6 x- J& K1 p* o* d$ X Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 D7 I4 S5 F% WSeptember. Non-financial investment grade is the new safe haven.6 q6 c( E- C+ S' }% y; g U; G7 V
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ A. y+ G# k0 d' d9 Cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 d" U6 f5 r, g/ p' f
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 K! ~7 R4 u; Z& h7 a3 X' [& Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 }! {, z0 l2 x+ uCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 f4 W7 N. B3 O* {
positive for the year-do-date, including high yield.
, S# H/ J/ P1 r6 y" | Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; ]# B) \* c) s. [0 j% q) b
finding financing.6 Z R0 ]0 x# I J$ W1 Z! V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 p5 z9 U0 n2 }, W4 ^were subsequently repriced and placed. In the fall, there will be more deals.
) \) N* h* w9 o& q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 c6 V( V! R* ~) b* }is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 `4 Y0 Z/ }% C( f7 s* {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 y5 d; b5 Z9 J; k. Ibankruptcy, they already have debt financing in place.
8 a% b2 U- U( _4 x European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 P$ [; k( d7 d! m. Ttoday.
( k, C& X# j( j* C6 g2 Z6 a Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, U) s Q1 {% h8 R4 gemerging markets have no problem with funding. |
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