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发表于 2011-9-17 13:16
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Current situation s. r, A0 A. I M+ v8 p
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: I/ d9 a) K/ t9 _- {! Q( ?& X5 W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may$ C- E, n0 d" A8 R/ n
impose liquidation values.
3 r1 s: `9 u: S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& v0 @& l- g, v; ]* vAugust, we said a credit shutdown was unlikely – we continue to hold that view.
- k2 F' I; M" q( q. z# v/ o The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) N) ]3 ~; p3 Y' Y, U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., d# d2 D0 l! t
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A look at credit markets
/ R% z" P T) C* }; ]: Y1 \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 O' D0 k) X3 t2 P" {, G* T$ \
September. Non-financial investment grade is the new safe haven.% c [4 D+ S2 E3 m0 z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 q! S7 C( p+ ~+ z+ @
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) k7 ^: o& [2 {2 ^, V, H, }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) c/ h0 t7 s- Q% T& D+ r+ ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& v% V1 F3 q! _: tCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! ]8 u) a4 x4 e- U
positive for the year-do-date, including high yield.
% w7 ]) W4 J4 Q$ }* |) ~' j% c, ^5 l Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( x0 ~: v8 S' \1 Y& Sfinding financing.! V, v1 O) C) v, |% l" _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% [. h4 J; H X. l* g- j& b
were subsequently repriced and placed. In the fall, there will be more deals.
; K% E6 U6 n7 c* | Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 D) S! j. ~' ^) d/ {
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ K% F- w# g8 w. d5 g
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- ?4 N$ e0 W6 \9 R3 n
bankruptcy, they already have debt financing in place.
6 B1 Y+ \" w- a2 [: V A1 q4 r6 r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain m0 T, ?# g6 N6 @# h& f% W
today.% p+ m) z+ M9 C s* Z+ F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 H# d6 B" b7 E& q
emerging markets have no problem with funding. |
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