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发表于 2011-9-17 13:16
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Current situation
1 u. B- m9 \4 v) M2 V5 a8 Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 ?, ^. J2 E+ x
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, u6 z, Q& S8 _
impose liquidation values.
! B; T; U; c* d: N+ l In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 Q& @" ?4 [3 R. s
August, we said a credit shutdown was unlikely – we continue to hold that view.$ z. L9 c4 [0 c, v
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& }0 {2 G9 S {, Q8 [scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ u( S& s- l' y; B, x3 z) I
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A look at credit markets! X/ l1 ]3 ]; f5 D% P" A3 ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* q3 @7 a1 |* b8 W4 _: fSeptember. Non-financial investment grade is the new safe haven.2 @( Q% E% I; q3 L" ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% `9 X* h4 F( M, p+ [: P# cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ L. m) |2 P8 M! T2 ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# |* k' Z' a; x t
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 c; @. g! R: q( N9 S. i2 t+ u
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 w7 j# B4 u0 N3 _# A- C4 @ Mpositive for the year-do-date, including high yield.% D7 l8 f2 Z/ `+ Y; ?3 |% K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble T( L7 d/ M$ Q* T) l4 Z
finding financing.
. g, F: _" M. E+ F4 ~ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& q$ x1 v: X+ v" Q
were subsequently repriced and placed. In the fall, there will be more deals.3 o5 ~* N& {$ Z0 J2 P6 F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( ?6 O' H. M$ u5 |5 R7 c7 b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( \; M+ w* b, D4 vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% K/ a3 Y2 g* a8 Jbankruptcy, they already have debt financing in place.
& }+ b4 Q$ l0 V/ i9 t. @) s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. v- N- T! b+ B* K3 a
today.
9 f; ~; u+ i6 q, O. c. N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- F+ g" |% W/ \3 H" n- E) {0 wemerging markets have no problem with funding. |
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