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发表于 2011-9-17 13:16
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Current situation% E# r2 v" a o9 `9 w
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 D+ D/ q3 g/ c2 B& j0 gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, u. \- I9 K5 D. M: v' mimpose liquidation values.( u# X7 |4 k$ e" t
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 D" F/ b9 L8 Y& E, j2 QAugust, we said a credit shutdown was unlikely – we continue to hold that view.
. `# b q3 O/ @ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 G4 E8 R6 i5 p2 K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
) [0 h( O' i8 @+ r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in H- n" k2 _' ?* _; L$ l2 a
September. Non-financial investment grade is the new safe haven.6 x$ R, T' |( B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 l: b6 A) N0 G
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 b v% T6 M' C! y4 @% {, Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 F, S) Z7 Y! F0 b Z; K9 k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% O7 Q9 L0 a3 bCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, y6 e' i7 Z+ e# H
positive for the year-do-date, including high yield.
& B* t9 F1 ^0 {# O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
`/ o7 A; f7 P. y: Sfinding financing.. a0 h( Y `- }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) K: {* a. W# p6 k: Z8 n5 {were subsequently repriced and placed. In the fall, there will be more deals.
; E, \# T5 e; b0 y6 ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 q' b+ K5 q5 a& j2 D
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ O& W$ c1 w. ]# F7 [# |3 K% T" Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 t+ |" r$ L$ b& g+ B# M( ~8 bbankruptcy, they already have debt financing in place.
2 I6 Y( w7 g; F3 { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' e7 M( @, F; Z9 i9 ` R3 P
today.
! Z: c) Q+ D( ]4 m) g* `6 P0 w Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) |, k7 {: I* m$ d* Y& V- W* |emerging markets have no problem with funding. |
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