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发表于 2011-9-17 13:16
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Current situation
: Q5 H4 e h' y; o The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* S4 K/ ^% u0 A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 ^5 _9 M3 B- ]* simpose liquidation values.
7 ]4 ?' B7 T3 v2 P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, m2 y- A3 G1 G6 h5 f/ E+ w
August, we said a credit shutdown was unlikely – we continue to hold that view.. F8 P0 W! d3 |' S+ {- U, v# x
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; D! P/ \. T3 Z! w1 N# ~& Oscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
3 I G [) J) J% j! } Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# `9 c3 q- Q! @# i( k- LSeptember. Non-financial investment grade is the new safe haven.+ A2 }' v! h2 B* ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 G$ _& c* c4 G0 W$ q! b
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 C" u* P. b. Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! E& E( h: T" V6 y, K- E, i: Vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ p4 O3 ?7 J+ \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 D, k5 w+ G* W4 ~3 p
positive for the year-do-date, including high yield./ P3 z5 X7 i4 V1 h I) u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 `; L; r, {* O' s2 z0 B( k1 yfinding financing.* R) f: N. \4 H+ N) Q$ ~9 U/ J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 S! G; E& ~. Z$ e- ^1 a% M# `- Zwere subsequently repriced and placed. In the fall, there will be more deals.
6 D$ U: Q9 E3 V+ K+ s% z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; o; Y4 I: L% ^! z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# [! |6 T5 l+ {# I7 u8 C$ Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! n$ n) z6 T" ]# ?0 Y$ ?4 V1 lbankruptcy, they already have debt financing in place.
. Q( K5 R& J X5 c: E- P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 \) E, g& o! l" _% n d5 I
today.0 }, M" M8 t8 m- {" q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. U8 V: E9 B+ r3 A: temerging markets have no problem with funding. |
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