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发表于 2011-9-17 13:16
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Current situation
1 i( Y& S0 B' F The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 P8 @0 r P$ j6 Yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: B# ^& W. ^2 {: S- O+ T( b! q1 yimpose liquidation values.+ r& `# ?' P5 w+ @! u3 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# Z4 j+ {! A3 H' j- t
August, we said a credit shutdown was unlikely – we continue to hold that view.$ p" ?2 X& _- U( a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- N5 u ?- z+ r. Y+ ^- c+ a& G
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets' j1 g' l# H" s5 s9 t
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! `3 k0 B$ p7 G3 f8 P- j# b
September. Non-financial investment grade is the new safe haven.: q8 [1 q' y0 W: b4 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( I+ u+ X5 g% S7 y8 _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- V# R7 t% {' R0 ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" P' y- p8 `/ ^0 z+ u. u) f3 D6 I a
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' ^( l; w9 e) C( k$ PCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 Q, ?& Z2 X# Z/ c& h3 l
positive for the year-do-date, including high yield." K& e. y2 L( W5 y2 h
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 W9 u' }- y9 Z, Y/ T
finding financing.
6 f( B. G d1 \8 A1 C9 F5 |$ A# @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 q' Y; w2 I0 Y7 f% I* k
were subsequently repriced and placed. In the fall, there will be more deals.
, w! J: J; r- b) E) `7 m' `& l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% C4 Q/ {" ^" N! `, L) D
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" w, Y8 m; F8 w/ Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& Q8 i7 N5 r) v+ Y0 ^! i* a
bankruptcy, they already have debt financing in place.
: U, }, S. d. c7 _* T# B V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! q0 h# t: W& k& [7 j4 s! D
today.
% W' k$ ^' o5 ~% Y" ] \( ?) H Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% s0 H% {+ n+ ~3 ]/ u3 K1 vemerging markets have no problem with funding. |
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