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发表于 2011-9-17 13:16
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Current situation" h$ |! c+ b6 V4 E8 e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% K( p8 F; ~( S
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 n, o5 x/ O* o5 bimpose liquidation values.; e) ]8 g; w+ m$ Z1 b
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 R2 X; s) k6 t% ?3 y) yAugust, we said a credit shutdown was unlikely – we continue to hold that view." y# w! P/ X, |" T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ W+ f5 P: p. d. [2 c% s6 @scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) H6 x9 Y) C3 M5 E
# }! U$ U5 l% f- M1 B; N8 MA look at credit markets
( b. c w8 {0 H6 Z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 c0 ]# E/ }" m7 i$ `+ fSeptember. Non-financial investment grade is the new safe haven.
8 ~# W0 t. @ y: x5 N0 v; G4 | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ P D b- T0 U: N' J) w$ dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: ?" A9 X+ n# ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, ^! C9 M; f/ l) M) Y8 b( caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' G, b; p, n# \# ~. c
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 @9 j; i& `, u% ?$ R
positive for the year-do-date, including high yield.
3 {3 `2 d* [+ P; \. H Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: [& U* G6 H3 g: b/ d8 Y
finding financing.+ s3 |9 P8 P+ E
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 n, h- G, w. i2 Q3 _were subsequently repriced and placed. In the fall, there will be more deals.
9 r+ q V5 I+ z) X# N7 l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ ~2 P% j% u" x1 s- ~6 D- yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 s5 s6 J' O9 T& {9 Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! U. j j' O) R6 {% q
bankruptcy, they already have debt financing in place.* h5 g% }5 q7 l5 I! A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; I6 [! K9 N; `( K2 s/ I4 F! W
today.; z! I2 u) A ?: \, ]
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* W' t5 \! b* Z% n" {" m
emerging markets have no problem with funding. |
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