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发表于 2011-9-17 13:16
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Current situation4 _3 h; l1 V( D* d; y8 a
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& h! y \4 O% m$ P' h. k! x& D9 vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may/ j5 _ h! H6 h% n
impose liquidation values.
3 a9 X. J- j/ f+ \ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; r* `. P% M! M: U; T
August, we said a credit shutdown was unlikely – we continue to hold that view.( B0 n5 D% s1 i1 K r7 j
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 I6 p4 W& e" j9 L1 q6 Y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., A4 e) i H0 l5 y* Y
, i. C8 K& i& V1 P! YA look at credit markets" [) M( }3 \4 f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' U9 j# V `: D' [0 S# v" d% N
September. Non-financial investment grade is the new safe haven.- z8 [+ y3 ~" J- l1 k% t6 w+ r- q/ Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 q! Z# j" d5 I+ X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ Z2 }1 I8 k m( K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
$ ?7 b. e0 O. ~" z \" ?, w' K0 X8 z* O7 \access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 B: R, m) m- Z& E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% u L6 l0 P1 \/ ]
positive for the year-do-date, including high yield.
( t- ?' R% O+ E6 s3 g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# a; E! w$ q! `. P1 B* R$ U( Afinding financing.
' n& N& R" z3 j* Y. ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' M. j) C5 s2 `2 s
were subsequently repriced and placed. In the fall, there will be more deals.1 \ |; }0 H* h( A& _% _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: w* p9 k9 J8 a3 `% C" b) w( Cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 s" ~9 B( A: O% S
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. D- z$ W, c6 k$ r, C( W! {$ c
bankruptcy, they already have debt financing in place.
+ J5 T1 v [9 J) w; X0 s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 s# f& _9 }4 b8 y/ Ntoday.. }! H' k9 T7 `5 T& P
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* H; F+ n0 H! D0 Gemerging markets have no problem with funding. |
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