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发表于 2011-9-17 13:16
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Current situation
3 P: }* I8 R% Q q# V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* U* ~3 Z2 C. g; f* i" n1 gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 r# T4 Q! D$ k6 A7 q$ q) t# bimpose liquidation values.
# x0 r6 L- Q3 h6 v# S$ t$ D) m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: I4 D" P4 Z* W6 \! o% M% |
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 [! ]* E: O: Y5 q* |9 e5 I w8 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" j( U7 g. k- X, O% ?' ]( J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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+ A! C5 U8 `2 z2 PA look at credit markets
, c! e3 T1 i" L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 {1 K# t: d0 a- J8 h6 F* qSeptember. Non-financial investment grade is the new safe haven.3 q) b" l- Z6 i7 G% L6 F& F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 N: L& T. ?) b: [0 E5 h
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
V# ^; W3 W2 s( [% obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 b8 T4 ?( |8 A" D! E9 p) F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 J, M5 M5 F1 Z7 _/ \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 R6 B) R7 I7 L; T0 x; p3 Npositive for the year-do-date, including high yield.2 k7 \5 `; k9 s1 f/ [0 U' A( |
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 \& g- B, L$ l# o3 K9 N" F$ @
finding financing." s8 `1 J; A, `7 `. C T' J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) i+ k$ L% B6 c) hwere subsequently repriced and placed. In the fall, there will be more deals.+ n! v1 p2 d$ O0 w; V6 F& y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% d8 B" I- H0 z4 I" Z7 k" uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- }1 ]4 f* Q* p6 @" n7 p0 E5 s0 Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* V* t2 t8 s; A9 z3 l) Pbankruptcy, they already have debt financing in place.
; O4 c2 [9 ?% A" G( v+ [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# l1 M3 T2 `0 m2 C7 V# M) Jtoday.
$ @. C/ c1 D+ z: Y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 v' r: b% ^+ D% Y$ i0 |7 o
emerging markets have no problem with funding. |
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