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发表于 2011-9-17 13:16
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Current situation$ Z0 i5 i0 K" Q( H' ^( e. l
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& w. y: B2 Q- ]8 q9 ~* u0 O% t
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 Q1 `" T0 T1 ^. p. N7 t$ O: ~impose liquidation values.& y1 A5 X8 `0 [5 R1 G% O2 ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( r, G# v) J& F) i% XAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' ?3 e, w) [+ e# j. T. h The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' K3 y+ L2 t9 {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets1 ?8 v& t. y2 z3 f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ g; c9 P6 u9 z) ESeptember. Non-financial investment grade is the new safe haven.
+ l$ O( i2 x# }" _3 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 a5 i7 _: ?; Z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $13 H* z; j+ U- O0 {" L- `! v" }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 R! }! L/ P2 W- e! Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ \* c, S& X6 C. TCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# w% w/ M& P L+ G" ]9 `" `! \
positive for the year-do-date, including high yield.1 G& d4 b9 z' \* l! q- b! V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) e' z8 E) M- V+ vfinding financing.
3 k) [& K. B: X0 N, O Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 g+ D- @5 F' _were subsequently repriced and placed. In the fall, there will be more deals.
" ~0 q) H3 W+ {) o7 O9 \3 m# u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& n; m H, m, j% o+ Nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 \! P1 O/ V5 ~% E2 \( Z; A4 b
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 J2 g+ @! J; ~/ T; F% _" U
bankruptcy, they already have debt financing in place." b0 j3 x0 m; g2 v2 j
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 E: W# q+ ? Q6 X: {
today.8 E) t; W" K/ h: @$ V. }
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ ?5 L @- C! E! v' ?9 g+ Aemerging markets have no problem with funding. |
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