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发表于 2011-9-17 13:16
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Current situation x" ^- n; q) j1 r( N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" @- G9 S }) z# @
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ M7 f* G& m( t( \impose liquidation values.
& O( {/ ?+ o3 Q' e1 W In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# ?# e5 R# E. q
August, we said a credit shutdown was unlikely – we continue to hold that view.' l P$ J) R" k2 a1 T1 c8 T/ R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 C) \* l8 C" x7 M+ @! a! dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets$ }; w* ^: _ D8 I$ K5 Q* k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 c2 J1 B* i* r W, BSeptember. Non-financial investment grade is the new safe haven.
+ u$ \( D2 l3 H+ b8 w/ p! T D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& i% J! @. h. z0 K4 o6 S& T5 I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 A8 u0 g; E. d# u; F
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 h# Y X+ C* b2 ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ |# z) O& Z9 Q( qCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are ~1 K7 J8 B! E6 L
positive for the year-do-date, including high yield.! P/ f( O L/ w/ q* V; o) G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ d6 r$ w! @" K/ u: n; v( T
finding financing./ F/ v# @' j" T( Y/ L1 z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they: J) z. w7 D. Q& r3 S$ i( }
were subsequently repriced and placed. In the fall, there will be more deals.
& z& g$ `9 A# U9 w5 L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
p) a: ~2 V# u; G8 x4 yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, X+ n7 F$ u& R( C" P
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 k0 h. P; n j7 b
bankruptcy, they already have debt financing in place.9 \. e* K% A( L& b
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# w) ]; B/ ^/ L) D
today.) }' X$ A% d* a+ z" }9 e6 O9 r+ \- S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; ]5 \8 O* l# ]! T f
emerging markets have no problem with funding. |
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