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发表于 2011-9-17 13:16
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Current situation" Q: z- | |) `- G7 N, C+ P
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 Y; {3 p& o9 F& Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 Z% ?5 v/ g1 g6 rimpose liquidation values.0 ^) ^) z G/ ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In x+ U3 G+ u; U6 C
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 ]+ K; Z3 _# ~6 \7 ~! e The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 i, d1 L1 c; y- @% Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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% k$ q4 W: _/ VA look at credit markets( U: S1 v4 ^" e1 F" S" o- I3 b
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 m0 u" |& f. i
September. Non-financial investment grade is the new safe haven./ S; I% P! v/ _* X1 ?
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ U, q4 I5 ^! |) J3 `0 fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 p) w! ]* n# s$ I% y& e* P
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& |' s# t% V. K j7 V5 `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 t7 t8 w( t8 Y' p( OCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* o1 t( c& k8 i7 L4 h vpositive for the year-do-date, including high yield.# ]2 n* S! u4 p. k, p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 y* G3 G7 }' S7 x1 n# P7 Xfinding financing." c4 Z. W/ {+ N* X. G# x: M. z& W: i4 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% |* k* _- e* p. E
were subsequently repriced and placed. In the fall, there will be more deals.
8 T7 \% t) c6 T, S9 b S9 b# E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" Z; _$ K- `! g7 n+ B8 @. a1 N6 y4 I8 l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: K- {! M @. p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: w6 e5 w: p6 [4 K
bankruptcy, they already have debt financing in place.& r6 |9 S4 v7 x }" n) ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; x0 e7 Y! P. o6 m; dtoday.
( \3 Y; C' s1 c$ @$ s1 {6 @/ Y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 h# Q n( ~+ O- G- ^3 J9 z% C3 i* ^emerging markets have no problem with funding. |
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