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发表于 2011-9-17 13:16
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Current situation- q$ A l' [" D! R6 ?
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# I# m4 a9 b8 [8 m V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 S/ @% J5 S R3 o! B' ~impose liquidation values.# O& R% h0 [1 |- _+ g
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ {) w- {7 q& o2 ?! i8 S1 E6 _August, we said a credit shutdown was unlikely – we continue to hold that view.
7 `( D+ l4 f9 M, B. N7 s: `$ m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: u* n8 {+ e a0 Z! R5 ?9 |3 K' Q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% P* M. A6 f& V6 {( b8 o! |- T R' {1 A$ ^6 @ M
A look at credit markets
6 r) M+ E8 f- N. D+ @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: D# i D1 t+ A
September. Non-financial investment grade is the new safe haven.
6 Q! c5 \1 F9 f" C0 n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ r4 t+ Z5 i2 k% Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 Y; Y$ F4 {: F9 r+ g! I* @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* S2 N7 c! F' h' h$ f* b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 g5 t3 l4 |) F+ F- eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 ^3 e$ P( a) L8 @% ~
positive for the year-do-date, including high yield.
: q' d0 ?$ O# P; T# n) j B1 B2 n0 ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& W p% _. `; y0 X( k6 ffinding financing.7 T2 |! \0 W: @$ S% ]$ Q" O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 l5 d3 J3 F4 i# l/ T
were subsequently repriced and placed. In the fall, there will be more deals.4 r$ L4 @5 L# x/ H' ^( _' G1 c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* t. G) B& K% t% ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' ~5 z6 ?- n& H {: L4 m; {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 N) ~4 E8 n4 h( o. e' ubankruptcy, they already have debt financing in place.
+ ^3 H( h, ~& @# N2 R* s( U7 _ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 N* u& X9 Y! g" s# }) {
today.: R9 T2 t4 y. J# t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# L3 R. F* _& Z1 Zemerging markets have no problem with funding. |
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