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发表于 2011-9-17 13:16
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Current situation: E" ] `6 Q, f4 D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 [( o0 O- g! r( C; W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. s& y7 V! S0 h" n+ e- I. d
impose liquidation values.
* V, w3 x' E1 S$ Q& H! { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 ]8 G/ `: B& N; L$ EAugust, we said a credit shutdown was unlikely – we continue to hold that view.% B8 w' c6 P: k7 Q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 c1 r2 y1 }* g& ~
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 @& K" z0 F9 t1 ~6 n
2 O4 S3 q. n, }3 K% v
A look at credit markets7 ?7 f+ A* j& ]) z- d2 G1 M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in t' V' Z3 c- w8 V* S D# N3 l
September. Non-financial investment grade is the new safe haven.- b3 I. w- q& I
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 `' Q9 j: {* hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- C* t0 i' U" I) V$ A U7 }billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ J7 {+ t' f" ]4 e1 Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 r: O8 r: v7 ]' u8 ?$ B4 P! KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 q1 E7 u e" E# R5 D
positive for the year-do-date, including high yield.2 h, t9 }+ ]6 g, v3 z0 R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 J5 t2 I i- J+ c& Y6 R+ X
finding financing.
- p) A6 F- {( \3 ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 k" E* V) a6 d, ]- n% K
were subsequently repriced and placed. In the fall, there will be more deals.
- E3 e7 d6 r+ k5 z2 m2 e1 } Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 i# o% w" ?3 o1 O* f; [
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% ]4 q/ g' `' m# T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% v# W6 I. V5 l! K* P
bankruptcy, they already have debt financing in place.( X; ?8 d! f- m& H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& R$ V" S* g4 N2 ~
today." g$ u, e, w/ g
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
Y+ L8 L% q+ t5 e$ ~emerging markets have no problem with funding. |
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