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发表于 2011-9-17 13:16
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Current situation7 ]+ i8 I& P9 Q5 [9 F7 X5 {
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ N2 m+ o9 d: e7 } K& Q$ uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- j& W4 V# n4 d* S" limpose liquidation values.
1 g$ ^8 X0 k+ Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ ?$ y& c) V; y- }2 k& A) I) h# EAugust, we said a credit shutdown was unlikely – we continue to hold that view.1 e: T' C, L4 f- M) { e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 u2 G( {* [! v- L$ Y2 U% B) S- F" C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( Y9 W, G8 B z$ B/ j
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A look at credit markets
7 b0 ?; |" g8 B, s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, K% c$ G3 @) |$ k6 OSeptember. Non-financial investment grade is the new safe haven.
2 E% w5 D- y0 N6 V8 {% x High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* K! x9 s2 @7 l7 ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 P5 @. Y( Z# N# T& j5 Nbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- {5 c8 C8 a. | Z& L4 eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" h1 b+ f5 T0 rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ D7 Y. W, M% K; D: y ?positive for the year-do-date, including high yield.% H+ N8 y3 |8 k2 j3 G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 C# d7 L. f" Y- @# E/ Afinding financing.; C0 O3 @" {3 F7 p$ q3 i
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 @& r3 V3 `" P- j
were subsequently repriced and placed. In the fall, there will be more deals.
6 s8 g7 T" ]1 c% s9 A8 C+ v$ r) M; N) X Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ u+ ^2 s3 E' j! Q$ q+ tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; \! i7 _; Q$ cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 A0 W; C0 C. K+ M q
bankruptcy, they already have debt financing in place.3 {! j* J: J% i
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 o5 i) ^7 H6 v$ S4 }1 O Ftoday.
: h! r D" u/ V1 D6 Y# t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) }, \( N+ `! U5 s6 n& Wemerging markets have no problem with funding. |
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