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发表于 2011-9-17 13:16
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Current situation! k4 P2 k5 Z( z4 M" `8 g/ N4 ]3 L# O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 v9 r: Y4 u P
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 i3 e, z* T1 |& B0 _7 L1 nimpose liquidation values.
2 j" u: G2 ] ^6 s, d B& U- [ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 h2 O- h% x ]( l% B
August, we said a credit shutdown was unlikely – we continue to hold that view./ q& F. r3 t. I3 ^3 ^8 i5 c
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# U ^% p) L+ k7 D
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets3 @" t) U' r3 w. n' V. t0 k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% L( F) ]3 w8 j: I# O
September. Non-financial investment grade is the new safe haven.
; F+ a" D) f- Z P a+ t High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! X; F- S0 _" K) g. f" g
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: U1 X& a8 ~1 R8 F
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 ]) {2 s: Q! p7 l
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 Y0 {4 B6 Y: S8 w! T
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* `9 R& d2 _+ r+ M. Kpositive for the year-do-date, including high yield.
* n$ [; U5 F6 S7 q/ \, x9 {% {4 u7 P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 p" i9 q5 O4 C! R% Pfinding financing.
0 ?: M2 _5 R7 m. Y3 s Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 J8 y9 n/ Q3 \* owere subsequently repriced and placed. In the fall, there will be more deals.
1 S4 l+ e! |' u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ c1 | Y. _ a& e* C F5 T! M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. X. d; G5 P7 Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 ]0 U. l4 U1 ~- gbankruptcy, they already have debt financing in place.
* J* H5 t5 {5 |! g& D* }6 L European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 B( |6 a X" Q- s+ [. h# a
today." p' _& P* U* O& n/ _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; I6 m6 M- T: c7 k" [! `0 Q/ o( a
emerging markets have no problem with funding. |
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