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发表于 2011-9-17 13:16
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Current situation0 X( J3 n# M/ W" b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, Q* r5 p& E/ q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( T' }. y0 y% s
impose liquidation values.4 ^6 Y A/ s9 V$ G# L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: ?, p9 `5 |8 iAugust, we said a credit shutdown was unlikely – we continue to hold that view.; J! y: F. k* N0 u n5 Z! A- Q, y6 S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension h0 H2 O8 t% d( A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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$ u4 j0 u' X7 b$ E" `A look at credit markets
& w! d6 G* w1 Q: w, G6 A, ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' R. C; T6 P1 y. h7 _' w* ESeptember. Non-financial investment grade is the new safe haven.8 _( w' g8 K/ G4 H* r }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 A( H: H8 D kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
Z( t1 n6 ]) `$ d* @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 D& r4 I% I) O% H. Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* ^0 @3 `/ [6 KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 |+ ^; O: a( F/ u- X R' Ipositive for the year-do-date, including high yield.
* [' ~) X& D6 g9 x; ^: x Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% a5 X2 D* j. g3 g# H Pfinding financing.
- E1 X$ N& @: c6 f0 i1 G; v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ b/ v/ D! ^, T9 `6 r' ^% ^were subsequently repriced and placed. In the fall, there will be more deals.
# E8 v$ X# B5 n$ T Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 m6 G9 }" @, B' Y5 K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* F, [/ a5 [* o2 `3 Y0 {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* T) t: N X/ ]* ]
bankruptcy, they already have debt financing in place.
. _" X- z5 B9 @5 d* t/ ~3 w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 {8 n9 x8 L5 `; itoday.! v) A5 l6 B v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# L) b. X' N+ \9 |% C' X" y; Uemerging markets have no problem with funding. |
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