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发表于 2011-9-17 13:16
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Current situation* L4 x% h. W9 d% `! R
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: k0 G6 C$ G. W- @! Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, d% |6 V* K. {( O% c& ?impose liquidation values.7 h% c0 @) d8 Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( n! s$ `2 |4 XAugust, we said a credit shutdown was unlikely – we continue to hold that view.& g9 @0 p/ L$ @" O: @4 t$ k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 r) n, q3 m9 S% i- s% ]7 y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( B6 a4 u2 N) I% @$ V9 A; f
: g4 w. L6 u# o8 T; g: U) J2 _4 h0 V
A look at credit markets* d1 F) t+ L. E) N' s; Q5 p
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ [' e$ h8 o8 O1 ^0 g M! Y
September. Non-financial investment grade is the new safe haven.: e, U" ]& e( J% j7 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& E! _ }% g0 M" Gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* T2 n8 Z6 W! N+ a2 m* p9 J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" P! e9 l+ d* ]4 f% X6 b( saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 E% h: P3 N' H( ?& _0 a
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! r" \: B- C$ x, @
positive for the year-do-date, including high yield.5 l/ \! X+ F `! \4 X S0 d, E2 u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ n; U. ^3 L- M, j K H# w- [finding financing.
/ f0 m4 E, m7 C4 r, z4 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 R8 h5 M: Y N, i9 G/ W) x
were subsequently repriced and placed. In the fall, there will be more deals.! o3 i0 _2 m- c0 t5 {- \7 n
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) D2 d3 f8 k6 A$ k) h; D9 t
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: e3 l7 _2 o2 K% K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' K) v" C6 f, c/ J/ R1 _2 ~4 C
bankruptcy, they already have debt financing in place.
9 t& I# E* t* G2 K; a2 T4 i European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ Y$ |+ Q. |7 K) Z4 v% b9 K" M
today.! n2 x4 \+ i% f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 L, A4 M3 o6 J& v I, s5 L4 lemerging markets have no problem with funding. |
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