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发表于 2011-9-17 13:16
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Current situation) s) A- {# z: Y# p3 m4 h4 p0 X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 D1 l( A$ t1 A5 {1 }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& ], e8 ~; M5 n/ R0 y$ Rimpose liquidation values.$ v( i% X: a2 w8 ~! S6 \- _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In q# K7 p$ k7 ?8 g- ?
August, we said a credit shutdown was unlikely – we continue to hold that view.- [( g% q, q% {, z u
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
z: x' H/ w, i% ~ k; l" Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: p6 u3 h+ s$ H- h0 T4 q
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A look at credit markets
* i3 j' b. C# w+ \& v! D Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' X8 c. y+ f- r% xSeptember. Non-financial investment grade is the new safe haven.; r# _4 x. `* i7 l1 I$ ]5 f* h" y/ o* t
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( k' A. K! d6 j1 |then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) e% t& |9 w4 }% V. e6 c1 w
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( C O- l- f+ v, n) gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 ]# k# L! ?$ c( M3 ^( W$ k. M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 I3 j0 w- \/ `' b( Y2 J: ^positive for the year-do-date, including high yield.# x# J$ E2 t! B) Z+ ~$ J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 Z- i+ g0 d7 l0 ~: w
finding financing.: y8 \4 N0 z5 ~1 \8 y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. J$ A% |$ T: Lwere subsequently repriced and placed. In the fall, there will be more deals.
3 S5 }9 j. Y- M0 V' {# O: o, k Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 S! g1 @# [- G. n! L0 q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( q4 j: m' N) k' v0 x% W2 \$ V. K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. T+ w4 _7 [; C% ~6 e" Jbankruptcy, they already have debt financing in place.. t7 F* _/ L! X( l( X$ b3 f
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 O( ~0 g" S( x% V4 W7 i
today.
# i( b% E% v6 X) m7 d$ ~ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 z- a1 M1 D5 F# c6 @) A: X7 Eemerging markets have no problem with funding. |
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