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发表于 2011-9-17 13:16
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Current situation
6 _) T+ o% f+ P# \3 Z' f The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% h9 M" Q) v0 `& ^& z* s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! B2 z3 o' q8 I
impose liquidation values. s: b. c; n) F
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- M1 _0 W p7 ^. z* Q! jAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 w5 |9 Y" s* Y5 \+ ]6 m% R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 @" l3 R: M/ S3 F& [( Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: G/ V: G* O( @' eA look at credit markets" b# T( L; y& S- _2 I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( ], i6 [0 V& Z nSeptember. Non-financial investment grade is the new safe haven.$ b' s/ S# [3 [6 H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; x" r6 ?: D1 {3 Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- V/ z6 T5 \" ]( \- hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! N3 T) J8 x# v( V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& A: x& S6 }. ~2 O1 m+ B/ aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 L; l$ X9 K) J; Ipositive for the year-do-date, including high yield.
, A/ r9 B) x8 h Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
7 U- C" H1 O$ l4 J% Dfinding financing.( n3 l" s6 L" o+ ^ b. e) B; X9 d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# ?$ Z5 Y% f. {1 A! r
were subsequently repriced and placed. In the fall, there will be more deals.
# V4 f0 T8 [9 W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% Z9 g5 |* @' Nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 y0 W; b$ t. z7 q4 H2 F9 J
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 ]0 u) J% K) f6 u( m+ l# B3 B3 M) ]bankruptcy, they already have debt financing in place.5 o4 D: O; D! T) q! {4 D+ D4 P
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. `& K" W2 l- k& F$ M
today.7 U# S; v1 w i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: ?8 Y& k+ G+ p
emerging markets have no problem with funding. |
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