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发表于 2011-9-17 13:16
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Current situation- n) n+ S" b( w+ o( J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* M5 m+ H$ ~. [$ _% |$ ]as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ \1 w. L o4 |9 Q' s$ f
impose liquidation values.
; e/ l" R4 S4 l* `% o# p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 @* b$ j% T: k: x% fAugust, we said a credit shutdown was unlikely – we continue to hold that view.- k, g; k6 g4 d9 X! p9 U* ~: _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! M% F" H5 R, a- Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 j# R- H, ^; h: K0 ~5 H; Z! M
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A look at credit markets
D4 ~3 w+ m1 f# R5 [( W" c+ o c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 |4 D" e5 P1 G6 z: Z! _9 ~September. Non-financial investment grade is the new safe haven.. O; Y* b" H! x% Q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- t( s; G: L3 ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* s9 \; S. M+ W' v5 E* D
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* g- t& H# Z5 U3 s/ C) A% e" U9 @access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 u0 O- d% {9 o( }! S7 y' B$ F5 M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ }9 ^2 c& t# Opositive for the year-do-date, including high yield.) F( Q7 c+ h5 h# O/ O7 F" b
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 H/ l2 m, D; u$ w7 M5 wfinding financing.
& G$ Y4 [6 }0 m% z+ S: k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 u6 u. } A. Y' `were subsequently repriced and placed. In the fall, there will be more deals.& Q( o/ W6 F/ d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 p, g1 f' G; ~. u
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 M/ Y: d2 }% @( k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% _" T R3 L( ?3 o6 E* lbankruptcy, they already have debt financing in place.0 F) ]7 a9 W. }0 d1 M
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 a' r( e% z: t! ]7 s2 l' `
today.
4 k/ ~) L* ^8 R4 W) u3 Q6 p Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 F" i0 N6 @7 Y" G" \1 h% L' Z
emerging markets have no problem with funding. |
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