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发表于 2011-9-17 13:16
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Current situation7 Q. Q6 W4 t% Q$ ^# @1 Y' k
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. I( d. d8 X( N* c/ x9 f: J7 Bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ I/ D6 r+ o1 @# z* j/ y0 Jimpose liquidation values.2 }1 E; G' u9 h# {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 }! M2 U7 S" A2 h2 i6 E$ A
August, we said a credit shutdown was unlikely – we continue to hold that view.% @# `; {7 ?7 }6 k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, _# d6 [0 M' {- _; \ o7 V
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
- t: ^) {- P2 `3 |) L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ z: d% a; k# p* x V6 t( [5 Y- hSeptember. Non-financial investment grade is the new safe haven.( h! w4 Y1 L3 U1 x& T- f
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) L( \: M) e* j$ h5 u7 V6 Y/ `
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 v2 b+ N4 a/ T( M) E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" B; n" |! O7 U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade N* ?! ?' H2 L; \" S+ i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ X1 D% x X! q' h& \positive for the year-do-date, including high yield./ i! [; G8 a9 D6 v) B
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 X: B; U5 Y# b: G4 _finding financing. T% H5 H& L- {4 B" q6 i7 t
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 Y: E, t; ^$ ]6 G! K3 C- |
were subsequently repriced and placed. In the fall, there will be more deals.9 ]( D" P, I0 N' E3 }6 s
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: g& ?( R6 C3 D% Y, C( p ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 D* \% a( _% N0 [/ Z. G: _, _$ e
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 U' n, w* s3 Y8 Mbankruptcy, they already have debt financing in place.
# Y# ~5 K% C+ e2 T; t+ B2 K$ _ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. S, o l- G; w9 F4 X) S; B; y, t& l* Etoday.
; a0 P4 X) `) T+ s# u4 ?" T( _- Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 N z' E! c2 Z; h W
emerging markets have no problem with funding. |
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