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发表于 2011-9-17 13:16
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Current situation
: ]. n5 P8 H$ t& S0 G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* e$ m3 p/ r3 [2 L) G7 O
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* {+ J o1 Q5 |6 m( a' o2 limpose liquidation values.
1 W M) x6 v# t0 G9 P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" u0 a0 k% L& X0 B# S8 ~ s* YAugust, we said a credit shutdown was unlikely – we continue to hold that view.* X6 P1 X3 W* ? l" q1 N
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" l( M n' e9 f; S0 g l* g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 j) A3 c! ]8 |" d0 l
1 `0 ?3 A3 x9 p. i5 ^A look at credit markets8 Y+ C& i8 T, G1 \- i. `6 l$ q
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 }' S! n* V/ y# t8 o
September. Non-financial investment grade is the new safe haven.
( P" D/ p6 V' [& Q1 D% y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 J" B( v. j/ K( h" S' j7 R2 L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ n7 U |% e& _2 v7 B4 k8 z* ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% i# g' m6 h$ p# F5 }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ Y) j3 c( x' R( i% ~1 |, u
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are& N, k4 n' _8 G# D+ h
positive for the year-do-date, including high yield." U: T4 ?( S5 M# U$ a" M/ @1 W+ g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 J$ K: E3 R- _& {2 w9 X, b
finding financing.
5 y! y; z+ H! }, t; [ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% n* W; k" c+ {; e& t9 N- g7 J
were subsequently repriced and placed. In the fall, there will be more deals.- Z* |* I% g% Z5 Y. o4 X( l9 G
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 [2 Z' b2 m0 \" Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- _1 C$ V& N: K6 O: ~% j. ]+ w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: I/ n j' k/ Lbankruptcy, they already have debt financing in place.
9 |8 G- H# h% e& a! W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. |6 z5 U7 ]4 i+ Z+ C
today.6 J0 p* f" I& }/ I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& x# S; K! |- B+ f' m( Gemerging markets have no problem with funding. |
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