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发表于 2011-9-17 13:16
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Current situation# j" }6 y: C& Y- ?" @( P6 D& b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% |2 k, [, ]. Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ h' v6 g+ ]( x/ \impose liquidation values.
# W) V' t& k5 |+ g( o9 W+ ` In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ B4 G, k h# ~+ GAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ o k5 O' {& s1 U7 h
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# c4 W. H2 P' m$ d' B, c- Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: Y5 `5 K2 B! CA look at credit markets
7 L8 A, Q$ A# u* w% u) q: y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" z( z2 P3 r, Z1 P
September. Non-financial investment grade is the new safe haven.
$ `# V" m# c% E5 Q, b9 M High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% o6 N4 E' f V1 ~
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' R9 p7 T4 }- z9 _4 i
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 Q& h! c* W7 Raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
K7 u' o8 z. t+ M: i6 R1 jCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' ~3 m5 E% {1 D+ \( m% Jpositive for the year-do-date, including high yield.- N/ F5 X) E. h
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! j4 l$ u1 `3 v' E( z. X8 C, y
finding financing.
7 J+ l, Y) E8 i3 f6 {3 i5 c Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 Y5 j# g: c/ y4 rwere subsequently repriced and placed. In the fall, there will be more deals.1 P) {5 a r( P; w0 m# L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ @& }1 n: p/ {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# \$ ]$ R& Y S; f+ e8 Q7 r) b0 U
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 O4 l* y6 g+ \1 i5 B$ Z, E$ h. j: u& zbankruptcy, they already have debt financing in place.' V* v( m; X# f; E8 _: n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 ]8 Z9 `' S% W8 F) |/ ^, Q
today./ m/ E2 s: M" `
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 z7 a6 A1 l$ G! o9 [/ Zemerging markets have no problem with funding. |
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