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发表于 2011-9-17 13:16
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Current situation
# D! E' x/ Q+ I7 S7 M4 k6 @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* [5 {% e0 T4 I5 V+ m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# t% v& Y! c, V) T- ^$ P1 Zimpose liquidation values.
9 y6 ^# b( [' L9 n+ ]( D4 s2 r% B: T: S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% v: h/ z) B& |# EAugust, we said a credit shutdown was unlikely – we continue to hold that view.- k: r4 i; P8 U" V1 N
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 b( B- ?; T" f) n/ l, z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 x% t5 s, @8 J& A }A look at credit markets
t* j8 F8 q# g' x Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 w9 a; G/ W3 d
September. Non-financial investment grade is the new safe haven.: |$ V) [: ]1 g, s8 Q; r. c K0 C: H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! q8 f; ^6 S2 k5 Z6 i
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 o: z* ^- j# j4 @5 [billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ Y# B1 r: t A' M+ ?: w
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 H$ e4 } r9 K+ M9 e5 ^CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( @! s5 o* d. C; l7 G
positive for the year-do-date, including high yield.
+ l8 T' M3 S6 t/ n- E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* b M& F% ^$ x7 ^. \* E8 ~2 _, {5 Rfinding financing.
, d# n& W- C9 T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; O* v. i; m8 k" E2 x& \% C
were subsequently repriced and placed. In the fall, there will be more deals.
4 g0 E# X# Y6 E: J3 D; g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ K5 A; W' O6 G. I0 c- T, x- O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) M r. r, }6 T6 h9 v. }. ?
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for v0 G: [+ o, @, t
bankruptcy, they already have debt financing in place.
; I2 P- L, w. S) [/ M4 X European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# a1 i: H4 z2 q, D6 \( i# |
today.0 ?1 Z/ v6 d7 k& t! s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& T& m' M! b9 l2 Cemerging markets have no problem with funding. |
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