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发表于 2011-9-17 13:16
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Current situation7 h. ~+ z# {7 m+ ~: c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( J2 z, F/ t" Y) F
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 C' r& ?/ l" g- ]impose liquidation values.
+ l: @! ?% M- n; l; l In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 V8 m n5 |" [; n: |9 W7 v6 P4 TAugust, we said a credit shutdown was unlikely – we continue to hold that view." J. p, W- Q, n! T8 i/ B, N" ?
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" u, z$ t* [: B8 \3 y2 J' wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* G1 |& V+ j: m5 c
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A look at credit markets
( j y2 R- P2 g7 X/ i( w Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in& f3 T- v! p2 I# ]) q f
September. Non-financial investment grade is the new safe haven.
! u* H% R: s: O1 j$ u! K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* M+ S6 g+ O; Y7 r4 T- R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: Q9 O, b* O' t: g- g, {' C) wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- k3 @+ m# s- I& w3 d6 ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 A8 h6 _# N1 \+ L# {2 o- aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 n4 ?" \! \ C5 Y) }2 l4 I
positive for the year-do-date, including high yield.2 n3 u. H) J( S+ S4 u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- D7 j$ V6 Q" ~
finding financing.
2 a: g6 J6 q, y1 {0 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
g3 Y, K% T z8 `were subsequently repriced and placed. In the fall, there will be more deals.
5 Y; Z0 M& g8 o; u8 F/ x: V* Y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 k' o `. Y* p2 h {' _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ ?$ e/ N9 S3 E" G# ]0 C Z- o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& I" V$ x% Y9 Tbankruptcy, they already have debt financing in place.
/ y |2 @& t( v9 z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) |+ s0 ^& _% s8 ytoday.& x' ~0 _$ O# H" z4 M% Z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 z% ?' Y5 A* A# n4 J1 e$ D0 kemerging markets have no problem with funding. |
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