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发表于 2011-9-17 13:16
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Current situation& g' q5 d( r% b+ o9 J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& p. Y8 \$ X( G t& {" M
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: U/ A4 ^0 I% W
impose liquidation values.$ K5 E$ x4 q( k V3 L) I A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! H p$ V. c: w1 o
August, we said a credit shutdown was unlikely – we continue to hold that view./ t# A" m2 y5 b( B% G
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" e7 W5 a" C4 y. Z" [3 Bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 w1 w5 K0 h( F4 E, KA look at credit markets
/ w( s( ?: v M8 Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 F @& m* X5 R2 R
September. Non-financial investment grade is the new safe haven.
: \: g0 [0 r' O& i! B# Q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' f2 u2 q8 i7 d: H, r' ?6 b9 P/ D
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: z, {9 H8 Z, w6 T/ p) [3 C/ K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 U1 W1 B6 x! N1 x) |2 laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) B9 S. ?; S* t. `0 m# L0 K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. \' c$ q! G" o5 F6 [0 ?
positive for the year-do-date, including high yield.1 R6 u! s5 w( [. S7 e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble X0 s& a. N% ]; u
finding financing.
5 a( b4 c* N' Z3 ]' y2 h& A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 O/ M& ^, j1 t L; Uwere subsequently repriced and placed. In the fall, there will be more deals.
D+ H& }' W9 q' H% C9 n Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% Q; p" H. S+ T2 f! ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" }( N$ p) {5 Y; f/ Q/ Q! {* B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. j1 n9 z9 s+ {' t1 E! Ybankruptcy, they already have debt financing in place.
( Y! b% d% X% Z, j European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* L$ l9 B" N' @
today.
9 M7 E8 w# W; f0 ~ `' o) z5 A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 N$ e5 A( v5 J0 kemerging markets have no problem with funding. |
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