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发表于 2011-9-17 13:16
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Current situation, I9 } F# d/ t: n
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# C: L& k @; k% }" @2 u# H3 Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% e' o8 D8 w; k. qimpose liquidation values.
- r: r# F# ^& }8 W In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; ]! A W2 d, @- T* m5 b! A9 \& FAugust, we said a credit shutdown was unlikely – we continue to hold that view.! S% j$ M$ r6 A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; ?$ R, f2 s! [% q0 Z+ w. L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., @/ p& n3 N* S) z9 {0 ^
% z/ w2 J; Q. g: H% Q, o6 l0 NA look at credit markets: K5 g3 n" b: F: P
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 E8 l/ v) u0 }9 m' ISeptember. Non-financial investment grade is the new safe haven.. o. @$ L8 ^; G" Q0 Q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* q2 z D, O# Z/ K! R3 ^then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; t& c# H6 t4 V$ Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 |; u9 D" O7 Y/ L% z. P9 uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; P, w( I# n( _- n) D% y8 O. GCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 J# v) n4 d4 b7 h9 }$ h, P
positive for the year-do-date, including high yield.
0 M- y' N, {# n3 h Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 y |! ^" Q ~3 i% a1 S' z1 Z6 `
finding financing.5 ^5 n4 B* H3 F7 h1 {. ?5 t) y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' L, O1 X/ H6 f/ z* I, e2 |were subsequently repriced and placed. In the fall, there will be more deals.1 S0 M* T) \) p- j9 i
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 s) z, ?, L6 O3 B- r) `$ i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 q" a% ^: m, X) M6 _" D8 S4 Rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 v; A) R1 @9 L) V
bankruptcy, they already have debt financing in place.
% h$ }& f4 j+ o& W& m" ? European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( D( V* O3 d; \# etoday.* C1 f1 L5 s+ @& O
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" H8 t2 y" O1 Y, M) @) x
emerging markets have no problem with funding. |
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