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发表于 2011-9-17 13:16
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Current situation e) o0 d2 \; w$ B. x% f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long! N& L# A5 g: b. \6 b; q7 t7 T7 @: ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: N* g/ v8 f: \! l9 Iimpose liquidation values.: ~$ o4 _/ E7 B1 _; P) y% o/ w" h, T7 |
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 k) Z9 i3 l: n
August, we said a credit shutdown was unlikely – we continue to hold that view.( r% p# Y; l. A2 \* r
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" V Q' q* I/ a& N4 Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets2 H, k! O$ W1 R- F' J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 }' B* A0 |7 N; j% JSeptember. Non-financial investment grade is the new safe haven.
: J/ m2 U( t6 d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, p+ [4 S4 L# q* `
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
7 f( @0 h( z3 R5 i4 Z, Kbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ M4 s# R# D% c) {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& P" [$ a9 o+ s2 F% P) Y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ O! h+ @. n$ j6 l# F/ X: n; K _positive for the year-do-date, including high yield.
/ s) o8 s4 h% N( q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ U* P6 s# d5 gfinding financing.# g e% v6 d/ m' P Q L! v' C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; R) X/ U0 A, A) Ewere subsequently repriced and placed. In the fall, there will be more deals.' m8 k4 E% H( p1 @, R, U, H. n% c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 \, ]1 @: R) S' K( K a
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# f2 L8 T) \# M3 C2 _
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% j1 x/ Y: i" [' I r+ g5 }bankruptcy, they already have debt financing in place.! I. M/ A, \: O$ X" E) ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ }$ a9 ^" P: \* J" \- t' _
today.
, r7 a% Y8 K& A- ~4 ^6 m1 f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( `7 X1 e3 C9 {2 q7 s0 bemerging markets have no problem with funding. |
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