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发表于 2011-9-17 13:16
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Current situation4 j# A& |7 t/ `/ G/ X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; X* d( _6 ~. m, _- l* }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( J, H( I, W( r( x. N8 h) z# T
impose liquidation values.
" w# t2 U8 a9 `3 y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ v0 ~8 ?- Q+ ~ W1 E
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ m+ @7 k( m4 K5 {2 m) W6 \* i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ o) r; Q& R" H0 |+ g7 A8 k* X+ ]
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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" y5 N$ c$ D6 B/ ~3 N6 Z; F! O: n! UA look at credit markets4 }0 D$ j( x* e% `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 k I {6 `; USeptember. Non-financial investment grade is the new safe haven.
3 Z8 L, i( G9 n( P* M$ ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 S0 w5 h. c% t/ G) j6 Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) v8 b' E. U8 j) t- e; p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ t5 \ Y* p% y: I
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) G1 @: J0 g A: g, VCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 C6 c$ X3 r2 n# w$ S3 k( q8 Z! I. w
positive for the year-do-date, including high yield.
# Q) e n1 H* i4 P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 W' c8 m& i1 R5 n$ t1 @finding financing.
' C& w6 R$ s3 r6 l$ J7 p4 A! O Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 w2 m" S/ M9 }
were subsequently repriced and placed. In the fall, there will be more deals.* F# T1 w" `3 S% Y T; r' }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; p4 S* c$ a0 @0 e) ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 M" q8 l- z, e4 y( Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, Y0 j }% ~7 g5 l: o
bankruptcy, they already have debt financing in place.
- c' [- z7 Q& }: ]+ ]) w5 H; W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# c% X7 o3 Z2 T) otoday.
6 ]* Q7 t" r; F Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# m1 D- B5 C% ? k1 Cemerging markets have no problem with funding. |
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