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发表于 2011-9-17 13:16
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Current situation! j" J' F9 H/ ]+ M0 ~ }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. X; n# I f. r$ T. s& I; a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' ]5 @0 R$ K0 Y/ Z) `
impose liquidation values.! D6 ?5 X* Y$ Y( ^% Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 X, g' j! _3 f+ H: v, N6 EAugust, we said a credit shutdown was unlikely – we continue to hold that view.) y& }( r. `7 Z* {$ w! T K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 v/ F( _- U* @6 J0 bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
3 A" p! V9 A/ {" y7 Q/ k4 [4 q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: L1 z. k X% J$ l$ N2 b
September. Non-financial investment grade is the new safe haven.: V; \& ?! W) f" {' K8 Z/ [& }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 |; f. D. Q" G9 B& u' x5 r3 G
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% u" G, k9 {' O0 x0 `billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" O0 t3 }7 ^) f1 s" o Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' \' T7 D2 Y" r hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 n& R \, u9 j1 k$ s& y5 g: M
positive for the year-do-date, including high yield.6 D) h, z) {( c, t0 ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& i2 r5 o' c' a9 p6 J& sfinding financing.% v: E$ q8 ?' D ]" R3 n
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 U" {# |+ J) U; p# \) e1 ?5 K
were subsequently repriced and placed. In the fall, there will be more deals.
. H. c' O" J0 ]9 V. E/ d3 s" z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
^. x/ {0 V* q+ M/ e7 d6 K! ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 m, I, X. W, F9 o9 p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( w+ t& e6 e4 j9 ybankruptcy, they already have debt financing in place.
' V3 x* k7 k. C& H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 ^' }* n$ S& S$ J
today.
, V( C2 h' y, E) r/ d( n% ^' J; W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% E" k5 }$ j3 I4 e$ Xemerging markets have no problem with funding. |
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