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发表于 2011-9-17 13:16
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Current situation! p+ S# A, A1 Y3 a: [$ v
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 W: _# H) X/ i! [# K* a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. T- J3 A1 a4 g, `
impose liquidation values.: ^% i* A5 [* Z5 j- M0 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In" z8 A( L' ~3 z# g, E
August, we said a credit shutdown was unlikely – we continue to hold that view.
! D4 B. y+ |9 X7 `) Y/ X The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. G/ m/ \7 ^' I, v
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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6 b* k9 q4 U% E, V. H$ l' e* o5 NA look at credit markets
9 e" i8 S) |. B$ [' o6 ]; S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 } Q; I2 L1 x. W8 X* b- u. h9 RSeptember. Non-financial investment grade is the new safe haven.3 F; d2 p2 W8 z( u6 P6 A! i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% ]" [( f D0 [( W) I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ U6 j- e. y7 ]2 m: r3 z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 W$ l9 [4 d: L1 I% C7 A6 l4 [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 P1 b% w; E! F% B( [CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ z% X1 [5 C7 }+ |7 \positive for the year-do-date, including high yield.
9 ?- e; P7 J: \9 o- K9 f Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ g& s: r9 e, h: M. ~finding financing.
, ]. J; N; `! D/ G7 t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they: K7 N; K: n/ C; S( R# N
were subsequently repriced and placed. In the fall, there will be more deals." y O* P$ L" p! c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 C0 [6 M s- o: n$ [7 D+ j* T& W ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ r; n4 [- r/ o& ~) @/ ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 V( n7 M S, wbankruptcy, they already have debt financing in place.
9 _4 S, I( {5 M8 b( u% U European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 k. J1 T- V6 s) f& H
today.
& c9 s3 v2 L+ a- @ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! A6 l* S" X3 e- D
emerging markets have no problem with funding. |
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