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发表于 2011-9-17 13:16
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Current situation. w7 W' w2 c; |0 {7 `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 d; o. i( G$ S) s+ Z, m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, Y' r4 [- f+ Bimpose liquidation values.& h4 k* v0 T) a0 E
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% b7 d$ u1 i ]! {, z0 p
August, we said a credit shutdown was unlikely – we continue to hold that view., E8 b$ g! f0 [" F7 v9 ?2 Q0 v
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( }6 z6 Z! o. j4 A* f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 I. z% L' E b6 y, ?A look at credit markets
2 ~, D8 K! _" B" [5 X, V* N5 B, | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
+ y) J& Q, W+ n: @! g( |September. Non-financial investment grade is the new safe haven.
& C8 a+ w* Y' m9 b, B! o9 ^ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( u# h4 e+ @+ u/ D! F. Z' ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% u* M) @. F# @& }6 W+ Q1 ?. A) C0 W$ j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 F0 L4 ~; Z% a; r6 s0 V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. S& Z0 K2 E" ^! M/ w. d: o& d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 }5 c2 u4 l& p
positive for the year-do-date, including high yield.
; i; O& m4 F1 R7 k2 b) E& ]7 w1 B7 r Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 Z$ [4 ]$ Q/ B. @" _: o5 c$ kfinding financing.
- l7 _! W: F0 p6 \ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ X; `$ o& O9 Uwere subsequently repriced and placed. In the fall, there will be more deals.
/ i2 N/ e |, M0 w8 ^, T Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, [0 G9 M7 Y6 o% ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; \/ k P& J+ f9 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 H8 c! G- s& ~; @& tbankruptcy, they already have debt financing in place. j3 v' b* c" G6 c1 ?/ Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 @5 M* h9 v9 y7 }today.
2 j; ~! ^) @2 a8 R$ n' A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 p" h9 y4 A( v* ^
emerging markets have no problem with funding. |
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