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发表于 2011-9-17 13:16
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Current situation* B( U2 c1 _0 [8 _1 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: v: `! ^3 V! r9 K# {% }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may* n; C2 v3 G6 T" X6 j# A# Y4 Y' ?( z8 z
impose liquidation values.1 x1 P, S# \+ ]- ]& M
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 i6 O K4 Q! i* x: I" p( LAugust, we said a credit shutdown was unlikely – we continue to hold that view.$ G) N% Z B; A( d( s
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- F0 [8 S. T [' m- y; n" K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 Q) N {7 m. w' h4 u3 j3 S. \& HA look at credit markets; u( f* B$ R5 M4 j/ G
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 r7 r& U) m2 Q5 d3 y5 u
September. Non-financial investment grade is the new safe haven.
9 S; M6 {8 O+ w# J! c/ Y( p3 B High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 z1 Q# k6 s4 t( D/ L; w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, G1 q8 ] T0 u R0 s2 ~: W1 ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" t( G3 A. i1 k1 [$ xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: l& A" E( D% \- m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: i3 \& t# `2 zpositive for the year-do-date, including high yield.2 p4 H M* Z) V# \9 `8 y. u- L- G
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) [4 H2 r* X' dfinding financing.
' o( t, C1 }, P+ d7 N Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ h2 Y1 f& ?* O* r7 ]4 |4 B% _9 Vwere subsequently repriced and placed. In the fall, there will be more deals.
4 i7 e; c$ H+ E3 p8 g P8 G3 ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) V) o) ]' P; v9 b# ?3 S: u9 ]/ \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" a# n! l2 w# p1 p) d: N& f, s
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 b- ~: J |# J, [& @* `! F$ K
bankruptcy, they already have debt financing in place./ ~7 ~7 H y W6 y/ i* ^# W7 K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 T: L# Q; g( x. g
today.9 D8 w4 X; ?, e& Z$ U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' _0 I k3 |2 M" L ` U- a" Jemerging markets have no problem with funding. |
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