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发表于 2011-9-17 13:16
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Current situation7 k( [; x- g5 J' _: d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 y( E! \3 j& m( o9 O& e6 a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& C* z" Q& r9 W$ e/ {
impose liquidation values.
# i. q2 T( q j& [* m7 U, j1 E. V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; @7 ?8 P3 q( ]5 g: `August, we said a credit shutdown was unlikely – we continue to hold that view.
& h5 V5 J g4 j$ v- \* s' C; S: u The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% Z/ @% e& v6 X* k, l V
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 v. |* @8 N3 }* nA look at credit markets# |/ P+ c; Y, _2 r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 c1 P( R/ K; m
September. Non-financial investment grade is the new safe haven.. W6 G3 s$ n s3 H1 n* k: J0 `% a
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" l$ p: `* [1 L7 H* O5 s5 o; Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) n7 f8 Q6 ]1 w {7 u. D8 B8 g( W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 u$ a! U1 l4 z6 @% S h) B" faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 H% M- r$ k$ g, v7 l" J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' e2 S$ `2 M7 C* Upositive for the year-do-date, including high yield.
$ i# U) f' e2 ~! } Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 m; Y3 s E- {# y+ h# Yfinding financing.4 l: u8 W- t4 S2 n
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ o( {4 A( u1 ~
were subsequently repriced and placed. In the fall, there will be more deals.
v# [- {; d5 K4 R1 b O! x4 t( z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 @0 P5 ~: Z# s6 x7 S+ T2 dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 c6 a- i1 W3 J; ~+ x0 Kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 s/ ?8 Q5 j* {8 H& x, I6 X
bankruptcy, they already have debt financing in place.8 M3 B( |% j* e8 y9 s2 }" }5 G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- e" \1 |# z6 b9 Etoday.) s! W* I1 |+ r
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' P6 ~, g! G. j
emerging markets have no problem with funding. |
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