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发表于 2011-9-17 13:16
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Current situation, w2 u0 f, ]/ c( M
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ `$ |9 R6 _% i+ M2 X+ Y7 ?as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 B6 y% [4 e5 e( {
impose liquidation values.7 o5 Z3 [8 _+ f7 e) `( r8 D
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
v& `' s; D) }: uAugust, we said a credit shutdown was unlikely – we continue to hold that view.2 M* g" P# I8 P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) v D6 j* Q5 K! M5 B% T% o Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets& Z% H" \* E' N) y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) J* Z% J) ?# j+ ~September. Non-financial investment grade is the new safe haven.
0 A+ o" ]; ^ d6 s& R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ X; V# ], S5 P" d" a- _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! E/ u6 A6 z1 Hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 o$ \ j( D' w8 J- ~# [# f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ k$ W/ [# k2 M3 L$ \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! ^" o$ @8 c5 N4 Z
positive for the year-do-date, including high yield." H% W) _( W: A d
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
~& K8 A% c& T8 U- [finding financing.
' A8 a7 w; H, J' A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 _5 N- f2 Q/ P& {& ?% i' f0 `were subsequently repriced and placed. In the fall, there will be more deals.' a6 K, v, S) Z5 x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" e* ~$ |( y3 t8 I6 `
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, F/ k v& v1 q5 v$ Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 N6 [# A" i. c/ |0 Obankruptcy, they already have debt financing in place. G3 |9 X8 W# K7 ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 R* f9 s' i) N6 _* U' f8 r, L. @today.2 f8 x8 x V, q& K6 _7 s/ F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 ?6 J4 P9 b2 {1 W
emerging markets have no problem with funding. |
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