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发表于 2011-9-17 13:16
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Current situation N1 l- Y. y" Y! V$ D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' k$ m5 c' H6 o' j; Y9 ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 S& ^7 w1 r3 G4 d U: t& U7 ?' qimpose liquidation values.
. S, V0 ?. _. V$ v. Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) t0 }% T) O" g/ m9 z8 F# \7 tAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* O* d+ Q$ G8 z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, p5 |4 a' ?% ^* Q4 F' } a! u4 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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' d1 C' { U' Q) ?6 h5 _+ r8 ^8 A$ e$ HA look at credit markets5 F$ D ^ ?) G7 I5 V5 K8 N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in& ?8 u3 b1 t: [- H8 t
September. Non-financial investment grade is the new safe haven.1 N$ S. a! ` ]2 {; i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* J- j, P( e7 \( M
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 G5 F+ }! }# Z* p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, @! a' M! H1 ~" K5 |* gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! O* V. J g1 T( @" tCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- }4 O% G4 \8 e3 R8 X0 x6 X
positive for the year-do-date, including high yield." T3 W) D3 ]. X# u6 J. z. K, _3 d! K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; x3 T! x4 ?- lfinding financing. h; q5 _5 j* P5 u, F: J t
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ Q* y, f7 Z4 Y
were subsequently repriced and placed. In the fall, there will be more deals.. Q' E$ Z% S8 u1 d8 T* e: \2 T
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! ?1 q' z- I$ m+ f* [. g5 I9 v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# [* O$ E6 l: `- H/ K' J
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* [" f# s/ M" @4 ?) h5 B8 |
bankruptcy, they already have debt financing in place.5 J5 ^3 x; ?3 S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& k; H4 V+ A% S7 ` ~3 X) ^1 Ktoday.
/ b8 j! D& t% m4 _ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: @2 D6 k ]! p" a$ O3 u: [emerging markets have no problem with funding. |
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