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发表于 2011-9-17 13:16
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Current situation
6 C& [+ m4 X. L5 t$ @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& f3 p5 I3 A. S9 I6 e4 ^. O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ g/ j: _) B: h- c; r# \impose liquidation values.6 [8 R% L5 `! i( E# D' |
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' T4 ` }, H: v. eAugust, we said a credit shutdown was unlikely – we continue to hold that view.' u; I" K; x9 ^4 |% z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 Q/ _! ?9 E, Z$ f" ^' y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 l' J$ y7 ?7 Q. l5 E
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A look at credit markets- K0 v8 U/ H" i1 R% ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- O* R* g4 v5 k: Y1 ^" ?
September. Non-financial investment grade is the new safe haven.0 ^5 l* G: L+ H# v2 C- j3 `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& {7 Q: U- V% Z; O& \( t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. B! |' P. z Y0 n2 d' M, t- |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& Z+ d1 \7 t" C( X( I# ?1 d6 D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 s" s8 [$ L, r4 B3 W
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 m' s6 W: z, }5 R2 n
positive for the year-do-date, including high yield.
C. ?* f9 t+ Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 P3 o0 ~8 Z5 _6 b4 {* h8 q$ h1 M& wfinding financing.
. {" M0 B0 u4 K. \3 @% x4 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( Q# G, H3 n6 E& A! Twere subsequently repriced and placed. In the fall, there will be more deals. }; J! E% X8 b! V5 f( y- y( G
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( \& P: p* a6 {3 {- ~is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ _9 o4 j/ c: Q' U. x8 Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 g g/ P$ Y+ Q qbankruptcy, they already have debt financing in place.
1 ?6 v5 y) D& ?4 r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ c3 L3 G% A( v+ n- f t# W
today.
! n$ n2 K9 ]' m) C6 u Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 {7 i- w- K% ]* l) N) |emerging markets have no problem with funding. |
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