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发表于 2011-9-17 13:16
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Current situation, q4 }. V# I7 U! k: H6 ~
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ m B: h" r7 g- C
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 |! S9 ^( k/ a0 Uimpose liquidation values.
8 B2 M. m9 e( L+ a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 o, G/ R5 [! u; E) R3 YAugust, we said a credit shutdown was unlikely – we continue to hold that view.# |( |( b- ?- I1 s
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# z$ F9 z8 M8 K' C, U/ r+ m/ vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. Z' g. M1 ~4 |2 J* B! R; x1 {
/ N+ t- Y8 i( Q( e9 R" a
A look at credit markets" U: o; a1 h2 |4 e8 b7 L0 y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 w, R: @5 K' _# o7 `% \
September. Non-financial investment grade is the new safe haven.
2 T6 B" ]. c$ {, c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 R- O5 y1 R/ S( J0 L* D; [: Hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 f( K0 F$ m' L# M$ Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; |! F) d0 m* |+ p' d: [ k4 G
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: ]0 T" v8 X; k5 p' J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: c) m0 U" w+ V) t- |6 s- Q
positive for the year-do-date, including high yield.! l k- C/ H! F; D6 e. S
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 m! |& @1 `0 Cfinding financing.
) y, f) K* o4 L Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 s/ }+ a, z2 [$ c3 P! ]* `# ~
were subsequently repriced and placed. In the fall, there will be more deals.
3 u* j0 H5 T1 @8 ?5 ~! V9 R( @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' T9 ^8 ?) y) W# ?; u" i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" B$ Z( w4 U6 Q, r9 p/ E: z6 y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" w9 i" l. Y! E0 Q' f" Gbankruptcy, they already have debt financing in place.
" A# I3 y2 `3 f+ B3 {* h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 @' a# t3 U- F& [; F6 Z
today.
( h4 s7 }" n0 O. R! U8 u: J7 T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 `5 T# J ^1 c0 k0 K0 o1 v# Oemerging markets have no problem with funding. |
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