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发表于 2011-9-17 13:16
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Current situation% b+ w8 O' ?& q T1 E) c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* T7 n4 j& S+ h& U2 D! L/ was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
0 X/ ?% q/ q" y( Q+ T" @; r- jimpose liquidation values.
8 |4 O. @/ W8 Q8 w, Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 }6 A7 S: R- t- NAugust, we said a credit shutdown was unlikely – we continue to hold that view.8 D3 f. p4 h7 d5 Z" s
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* C9 j" l3 g! v6 t3 D3 Q8 \4 s% hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
* l/ s1 K, } e# p% d- ]" W Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 V/ x8 y* ]" g; c% K' f( ?+ w M2 C
September. Non-financial investment grade is the new safe haven.
# C9 S) Y% c% q0 ~1 i6 F0 L# X5 w, R! B High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 }+ D# @5 b4 \1 M) w0 E: }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 N( R6 ^6 [6 V2 E2 \$ l7 h/ S2 M
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 c' q; T' ?" ~( G! f+ s+ G" T! maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% w: v3 {5 F9 L. ?9 N. w& T
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: Z3 ]3 v4 t# A! p& C. D1 j9 P r- b
positive for the year-do-date, including high yield.
+ a3 x0 C) q6 j3 s% Z% O4 b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 o5 ~* z8 n2 D- N( ~8 O
finding financing.% ]5 M# S) d; n# x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* H! i) R& W. Z0 @0 b
were subsequently repriced and placed. In the fall, there will be more deals.% H: _+ _6 p8 F4 J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, S( g) y; _$ d- Y* ^* _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% y/ w8 `( K4 B# j. I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% |& n( m9 r) P, e+ C6 `bankruptcy, they already have debt financing in place. X. I% r; O6 x) d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 i5 X: `8 @# z" Y, n! K
today.2 W, [; @' F$ f) V5 s, C
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 F' }% }$ [- F. ^- Q
emerging markets have no problem with funding. |
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