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发表于 2011-9-17 13:16
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Current situation; ^+ \- C* ^ \$ d. x
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: d3 X" m& ], K c* B5 I. S6 F# V* ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 P; _5 q7 D vimpose liquidation values.
8 q# p7 g/ \, m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. j( e2 O0 h; r! a8 D( J9 }
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 c6 m: f" ~0 y, D+ i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. _# I7 Z0 q5 q% T6 }scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
! \6 p9 |% ^4 C. B6 E6 h Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
L7 c! K: C; ?/ L3 L- v7 BSeptember. Non-financial investment grade is the new safe haven.9 S4 r8 c: T, q" O
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ w! e! ~2 c8 ?# F, @' j. s% _9 C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* d0 p, G, X1 P' _9 P6 b
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ E0 Z( ^. k) c
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' N' r8 D& j" M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ H; v( |1 h/ H- Jpositive for the year-do-date, including high yield.
3 q2 e# q* K9 F9 P4 g, m) f Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* ` m: Y1 G( q8 P! V5 D
finding financing.0 [) ~- T2 b Y! L# I% E
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; }' z) O/ i" y5 B
were subsequently repriced and placed. In the fall, there will be more deals.* X* a. Z2 @" M$ ]
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* z1 U* h+ {) B5 V( his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* R# l% v' s" e# P" ?
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 B7 U2 e' ~( V8 d2 `
bankruptcy, they already have debt financing in place.
( t; {! `/ X n; v- _2 [9 _2 Q" S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 V7 P: w: j X) f
today.; `9 [& H' Y! i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! j0 i! f1 Q9 M) f; F* U, |emerging markets have no problem with funding. |
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