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发表于 2011-9-17 13:16
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Current situation& ~% u5 a: p% P& H U0 O( e3 O% m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: f4 [4 U7 u$ g2 o( J, \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& w |* ~' K B. X5 k. n5 B" t6 ^5 Q
impose liquidation values.
2 y/ R8 \# e( Z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
{. ^9 t8 s: J6 M9 C) BAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 d0 e" Y2 I' ~ E; [ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; |# G* {1 a/ @$ sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
& h4 W6 @1 y( C5 V; e Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ }" `- H0 Q" u1 U, | K% I
September. Non-financial investment grade is the new safe haven.; m- J% C5 i0 |7 }& Y& b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. w5 d" A( B% |- P0 }
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 X" s. ~) K# O- B' j; ?- C. X" [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
u2 Y( Q% g+ I- ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 B3 k3 j0 s0 s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& y; |) m3 L1 I3 U9 b! I9 rpositive for the year-do-date, including high yield.
9 F* N1 Z* r% v Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! g$ ]( v" Z$ H# ifinding financing.
/ u& J: r7 m: h+ O$ K6 O# g( z; O Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ F! k/ E# s" g* S4 G3 d5 [+ [were subsequently repriced and placed. In the fall, there will be more deals.
# O6 o- j8 b5 _# S5 D6 q- p: K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: ^6 b0 G# [$ l3 F: e4 c
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ m0 A& J2 W" g) a2 @0 L+ `- f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( D& [1 I. |" y: I8 D
bankruptcy, they already have debt financing in place.
/ g( \2 `6 M. D1 Z; O0 b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ `. r+ s: d; g! C
today.4 [2 h! i& o8 p' c& S: F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; H2 ~4 }9 j. V; \6 {! D9 I. ?) [emerging markets have no problem with funding. |
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