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发表于 2011-9-17 13:16
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Current situation% I6 A6 z2 q( W/ D. a M- b+ E
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 w; ?$ L8 Z8 @1 W* f- L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# A A3 @4 V2 ?5 [
impose liquidation values. k2 l) V4 O8 y2 S v. c8 a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& h" v6 K$ Y% c% f/ G( qAugust, we said a credit shutdown was unlikely – we continue to hold that view.
; ?6 |8 J6 _4 ~# V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" T2 A. c0 R0 D# T( Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets7 g! B4 D; d" m" N. P3 w
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, ^/ u/ X* A* F1 i2 G+ x
September. Non-financial investment grade is the new safe haven.; v& G# N3 l/ p3 i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 K& P$ U: a% `' ]6 y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 Z f- o$ W) v/ m, v2 l6 r
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 W# T0 Z0 _0 W6 d, m" L ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 E* m2 X5 ]. g; D7 F zCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' l/ ?* E- T$ ~, S. M) cpositive for the year-do-date, including high yield.! r6 E6 g4 S9 w& l$ }. G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; l! n. |$ M/ q" P1 m2 G6 ~4 L Cfinding financing.- c$ w' u3 X% t
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) Y T. M/ o) gwere subsequently repriced and placed. In the fall, there will be more deals.+ K k- P/ S, u
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" e5 t, `1 Z; M% I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& ^+ h& v& k# n- R, m! `
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( k8 }4 Y) ?! p# f( h- t* R# ~
bankruptcy, they already have debt financing in place.
! Q; G6 I+ j* k; r3 R" c* X European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! o# `- ?5 m% [2 Y) q* Wtoday.
% @" V' C: `+ l( \ _$ A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 R/ f! c: B* ^/ ~0 N7 Eemerging markets have no problem with funding. |
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