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发表于 2011-9-17 13:16
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Current situation$ p# y0 E* W* g5 y) _* [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 H) F* P$ {- L9 ]' k9 k
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; @8 G) A+ t) e3 uimpose liquidation values.7 z* h4 N2 h) o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& e4 K4 t9 v1 k7 e/ @* ~August, we said a credit shutdown was unlikely – we continue to hold that view.1 a! f9 O# b7 t' V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: Q q5 b w- q' T0 Tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! ^7 Z1 N# y4 |3 c) e7 c3 ^ w) ~: Z
6 x6 b5 ?: W+ i' |5 j9 yA look at credit markets: p" G" \3 s9 [; G8 z$ g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& n4 N7 m9 Q; o5 g I% kSeptember. Non-financial investment grade is the new safe haven." r" q6 c1 {! U5 n* Q, p
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ x* f& L# I }; c/ Z" I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" Q8 o& G" z: V) U/ Tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 W3 g M! z# v( B9 ^* Y- h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, s) @& O7 G0 x& Z' aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; G: ~0 D- Y! L* _8 G0 Xpositive for the year-do-date, including high yield.
( R m5 Z) D8 ^ h6 f! D6 @- k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 F8 N* G% S) Z# p# D) c4 t# pfinding financing.; R$ c, K. C( F5 b
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 g7 I7 k- t2 x ]
were subsequently repriced and placed. In the fall, there will be more deals.
! b8 O; T' J9 x( l) L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 G# ^* A! p! p! X9 Z: |' y& `$ W$ Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# C p; W; v* d6 o* z% z% v6 G6 p8 I9 mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 i( f) ~6 ^- K- Obankruptcy, they already have debt financing in place.6 g2 W* Y, i+ j" s
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% y4 I) l0 ~' ^; O8 a0 Utoday.
$ Z% p# P% A+ j Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 c" _1 m5 S; zemerging markets have no problem with funding. |
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