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发表于 2011-9-17 13:16
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Current situation
* @, P( a6 f+ p The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 O. T" N2 m( A3 @. Y! q, ?
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 P1 P, s9 o: I" Zimpose liquidation values.7 D; h0 Q+ ] s* x, c- G0 h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 f4 n: g" Y* y' J6 i- Z" [7 x
August, we said a credit shutdown was unlikely – we continue to hold that view.9 m3 N4 i, b5 |$ |/ }% F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- Q. w4 @* M8 [scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
) V! U! Z f- E W2 X _8 w( a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ [$ ` v4 k+ @9 R7 U0 V
September. Non-financial investment grade is the new safe haven.- X' ?5 {6 G7 \- @$ M2 O7 D( S6 T' W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; X6 u) t- I9 `/ P( xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 n( t( X% C8 S, H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. W7 k' I* _ d7 v0 X9 B% ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 m. Q3 v/ O% _ D; u, \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" ^3 F9 U% D. K v6 ~+ `positive for the year-do-date, including high yield.
) C4 O" J& i) e- Z8 V, b) y8 g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ e( o; ]5 T9 v! d3 A; K, X& ]8 q4 ifinding financing./ N# h' z9 \) F2 u" `; o
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 b3 E+ Y$ }2 z# w. |
were subsequently repriced and placed. In the fall, there will be more deals.
: y6 L* V9 j; I* K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: K4 Z3 o( L/ @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* Z$ p$ \9 l% N4 e1 k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 y5 @ ^ C/ c5 nbankruptcy, they already have debt financing in place.
0 M0 @& y- p+ V* p European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; H- f" {& b- O3 |: r
today.6 X' |, H, Y6 p: z2 n' o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
r1 {: y+ S8 pemerging markets have no problem with funding. |
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