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发表于 2011-9-17 13:16
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Current situation% H+ L) d( _& ]! y% c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. N5 f0 S- a/ Y) r6 h5 Das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) a' C6 u# P) i* X) S$ a
impose liquidation values.( O/ E* M2 I3 ?2 N" o4 t1 m
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 Q9 [8 t. `8 {& C+ `5 }6 G9 r
August, we said a credit shutdown was unlikely – we continue to hold that view.
. w+ }" \* }. q2 V. u The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) v3 ^& A7 [2 T/ `6 \' {
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
/ z/ E/ X$ U1 F' l Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ F7 ]4 V9 O2 d' D4 P
September. Non-financial investment grade is the new safe haven.& V5 q' K# S& Y# I6 s: g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' o3 N$ W* ~+ E: W) Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' V' N( l j) e, cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! e% j5 N" r+ B: waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 |; y# K$ [$ v' \& H& _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" w. [4 d6 \. K. D
positive for the year-do-date, including high yield.5 b) W1 z$ p, u+ I5 e% R0 z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& Y/ o( K' s2 u+ cfinding financing.9 j, b5 r1 g' x8 B; `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- M% o. _ _' s+ t8 X. `( a& S& p; ewere subsequently repriced and placed. In the fall, there will be more deals.
; z% J, o7 e$ M Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ y( F+ l& L5 Qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 k9 Z% m3 B9 { wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 M+ f0 \# C; b6 a
bankruptcy, they already have debt financing in place.
* _& l: L/ h/ P" S2 H1 g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* E- Y( ]7 Y y7 K- v5 B
today.
3 K" F( d- ?* U! H/ b& C* x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) d$ V' i; C9 O; p; O. d% T* kemerging markets have no problem with funding. |
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