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发表于 2011-9-17 13:16
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Current situation
2 N) \; |0 K! [2 S( X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% e S5 ?1 [ ?5 las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, ~' R1 e4 q9 D* N! c1 {! {
impose liquidation values.' C! f) u- ]4 C. c, ?9 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" J9 k T* b B1 w# E: gAugust, we said a credit shutdown was unlikely – we continue to hold that view." v( d: v; n! c I( r
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 K* }% O: V) T: _$ c; g8 hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
$ R0 U- I0 h( b+ S6 m) J& J) c' m
' K/ H! z# l/ p' S( a; iA look at credit markets8 h; H0 c& l5 H t4 \$ P- `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 n1 n! D) [# V( I& z! @% fSeptember. Non-financial investment grade is the new safe haven.9 c' m4 k/ i- C+ g; }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 L/ t" p5 V' F4 o6 l! | |then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* ]& ?" ?( R* H" n( Xbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( ?/ R& Y& {+ g2 _access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 d+ ]" e4 X, D6 Y- X5 F- p! \1 M* Y( I5 aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) H5 _% b+ s5 D! ~positive for the year-do-date, including high yield.
3 G( r; \# j- E7 k. E K Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ Q* E; }( K% }; l. Sfinding financing.
$ J+ t, ^* D: `* t" M% z) Y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 N- c2 c: q. a B) {9 z6 pwere subsequently repriced and placed. In the fall, there will be more deals.3 s+ { t. e) h: O7 a _0 |6 n
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% O! `0 u/ i, A9 v: f0 \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; m3 O$ H* c1 o5 }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 H% d. z" g5 I+ d1 t" P1 jbankruptcy, they already have debt financing in place.4 @! l, c6 V2 i& z, k2 R" E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 V1 `; b9 W* n
today.+ J, E# b2 E, }5 K3 J7 O! m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 U# j9 X1 ~/ Q0 F( a* I* l1 `emerging markets have no problem with funding. |
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