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发表于 2011-9-17 13:16
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Current situation
4 Y5 ]: k- g+ y6 Q. o The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ X/ Q( }. s8 \1 x% ^as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& |; U/ e: ?7 X. l9 H; A9 B0 J
impose liquidation values.& _1 C) B6 s# C/ n8 F
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
M+ K; R3 s) _- D# uAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ Z- R) a- d8 `7 A9 ]
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. L4 D/ v/ M* Q6 V4 Y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets" n6 [' W$ C! b0 d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in e, p. M9 Q z6 a: V# {
September. Non-financial investment grade is the new safe haven.
& D2 ]3 A6 W' g2 `) L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* {: g5 R; C0 B# v0 uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% O3 u7 w% }8 Z. h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) v% o, s, ^1 Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 i- d. N6 y/ cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' r- R2 [2 v K6 V- l, r
positive for the year-do-date, including high yield.
7 M; O' _, D% |0 B; H5 o9 {, _* s+ P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ C+ U6 ^3 d9 ? kfinding financing.3 B& ?6 e" ? ]5 i, ~- V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 I' Y& k2 ~4 f- m. d a7 b- pwere subsequently repriced and placed. In the fall, there will be more deals.
! G$ H; H* a/ v7 K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) }/ j7 }# s" b0 z q6 ]
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were1 p; m- I. S$ U# @+ q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ I. `0 \+ T( V
bankruptcy, they already have debt financing in place.# g- n$ x7 r$ I* e1 E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 Y/ S5 M: H" V9 t1 v# X0 U$ U7 ptoday.4 B+ e6 z S* F/ Q" P# G% T
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) V8 q# x; S; S4 S
emerging markets have no problem with funding. |
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