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发表于 2011-9-17 13:16
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Current situation
J3 u$ d' A! i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 l" K5 _' {& P7 ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may* I0 V2 v* u4 g/ A
impose liquidation values.4 R* D; N, d7 N; ~# f! m1 H
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% V+ G1 u$ h7 z3 @$ u, V
August, we said a credit shutdown was unlikely – we continue to hold that view.* |6 _4 M5 T) O' ]; x4 x7 C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 k" \8 D2 ~/ L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: T) l! O: w4 f C* A" aA look at credit markets
+ c5 l& [- m0 ~! b# @0 n4 n- ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 Q2 u$ o( Z& q/ d
September. Non-financial investment grade is the new safe haven." e# D" F X! f. G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; W# a* p/ a/ N* X$ Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ S2 u+ a2 f4 ^* D4 j+ V
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, V8 H' @6 q8 D; [( E, Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! l3 A) O9 W: @& j# U% e
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" e5 z/ g- O6 F) z" @* l" r8 _
positive for the year-do-date, including high yield.
' `; R9 m w& {5 m* x Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ ~. F/ T1 W( Z" m- [finding financing.
8 t+ m: z9 e+ @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& d. d" T7 c% N4 N
were subsequently repriced and placed. In the fall, there will be more deals.. D: }- z0 f! g9 O
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' U2 a. x |# g5 Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 X0 ]- V. B3 f8 x) i) O% z+ Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 i, i' H+ d' x" g' H
bankruptcy, they already have debt financing in place.
; B9 ^- J7 v0 ?4 K European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; U/ l+ W* K- O9 C' r8 W
today.
* |# o7 R0 m) I. F! K! L: N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 X& X& b B! x) S" E8 o
emerging markets have no problem with funding. |
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