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发表于 2011-9-17 13:16
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Current situation/ b* J/ L' w: V V) M, W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 b, q! T6 ]# d7 J% P; G% G6 f2 q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ g" y/ P& Q2 ?& i- S" bimpose liquidation values.
9 ^2 d/ a1 j! a9 X( ~ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! S: P `, H: v# K+ l
August, we said a credit shutdown was unlikely – we continue to hold that view.. _+ B, P# X5 k% I1 d* y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# u S& l7 ]6 i) D
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 x( N7 K& v0 q: n% ^4 g( N7 w. P% g
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A look at credit markets+ h$ D7 z! v# `" i6 g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! ^* Y5 q5 D9 mSeptember. Non-financial investment grade is the new safe haven.# O1 M2 e. e* Y4 `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 L+ y. f |2 k4 u: d, y7 Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ I# B, B4 |) Q+ L: f$ O; J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ [. f4 P8 P, q. _' y& jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 d; `: J, g. x1 J1 r" n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are _* s% R# a7 {) X( I t
positive for the year-do-date, including high yield.
0 |4 v! f; p7 P& d8 W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 B( X2 v! V$ L, ~5 ?
finding financing.
1 V; t* O1 O4 D7 }. W Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 @+ _% x, `3 A5 b; T1 Hwere subsequently repriced and placed. In the fall, there will be more deals.
; R" n% B) \! f/ k7 \6 z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 c. q( W* P+ c" I& R, ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! w# |2 x/ V1 r. [' \2 kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" V. O2 P3 D0 v# s8 [2 Lbankruptcy, they already have debt financing in place.
6 l7 _: [9 z. { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, |$ Q# i% Y b+ S5 L! R' Q, _today.- B( T* U; u6 C3 w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# r! W+ H+ T1 s
emerging markets have no problem with funding. |
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