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发表于 2011-9-17 13:16
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Current situation
6 e/ F1 C9 G. S$ }6 R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( W" ]7 b9 B1 O$ K$ [7 C, k
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 |" [* ^, G4 u4 T
impose liquidation values.) \) Q' q% g% x, Q; V
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ ^% i, F& H$ M! A. U8 R( |
August, we said a credit shutdown was unlikely – we continue to hold that view.* L6 D2 e, r; e n! o# O4 r* K$ q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) F$ O) V" Y1 B* P
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 \2 l' P: F& _. ^. _6 W
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A look at credit markets
n6 ?8 l' w7 j: F* `) { Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- d: A- {, d# T& k* Y' h7 fSeptember. Non-financial investment grade is the new safe haven.: X0 p+ n/ w$ v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- K; }" p' H9 Q1 g5 U/ Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, t: @- u: M4 o9 }1 I+ A6 n8 ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 ?! H6 }$ u; |. h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' P2 _& K3 c- ]* ACCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; C( z+ L3 n0 T B6 a
positive for the year-do-date, including high yield.
2 B2 R. z( h, I! R" }4 ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 b1 o6 D( {# ^: w6 J' k
finding financing.5 q! x8 ^+ j4 Y) J" d- Z4 F% j) }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* n! \* M2 o. Z. Kwere subsequently repriced and placed. In the fall, there will be more deals.
, B" D ^: E: @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 b" w+ p# c" iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& E4 P; f6 j' M8 Q9 E! u" Q) Egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* l& b$ W- T) w6 z6 Q8 r, Sbankruptcy, they already have debt financing in place.2 U6 w# m, W% u: U: O- T! y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain D% ^3 A9 d9 P( |9 f
today.
0 \5 t4 \, z3 A: M% y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ g# [8 E# o$ n
emerging markets have no problem with funding. |
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