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发表于 2011-9-17 13:16
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Current situation4 |, t+ r3 a) }5 ?& t
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% I0 C. B- C8 L* S: aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may |1 D& P0 @" Y/ `3 K
impose liquidation values.
0 y+ `) i' y: v1 @$ O2 F0 R2 H In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. {# ~2 C( {5 m
August, we said a credit shutdown was unlikely – we continue to hold that view.) W- P: y# c0 o0 P- ]( z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( ^" h, N- M: S: k d7 a0 f4 @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& l0 R5 m8 t" |, t2 M* o5 EA look at credit markets; t# {8 r( R; I4 V' U5 n8 D
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 s" W* R$ b( P- v( N: h
September. Non-financial investment grade is the new safe haven.7 s z* Q4 [) T; S+ ~: f* B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: F! c/ N, m7 v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $13 m3 d+ w; M, M8 j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 I: S, l& W) p4 o- T0 f5 X& `access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- z- i" y" R8 m, qCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: V/ [2 R0 H2 Z' `' j7 y( zpositive for the year-do-date, including high yield.* a! ~/ }& r& U# b
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' ]/ s( \6 Z/ {% Ufinding financing.
- V0 k* i+ q' W, j1 b Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- n* a$ m2 }# B7 m, D% E. Z
were subsequently repriced and placed. In the fall, there will be more deals.
9 r+ Q) b+ [' q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 ]# k+ A6 e3 S' G3 [) Q4 xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: \# s5 [1 O9 {. L3 O. E. wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& E* W1 r9 z5 @& a7 Q# T% D6 Q
bankruptcy, they already have debt financing in place.
/ `3 k! P0 Q8 V% P5 g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 Q% X4 |) K2 e8 J: r
today.( W5 m) Q: X7 X" H* h% l& a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 F/ J3 h. A. A9 y8 V' Y
emerging markets have no problem with funding. |
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