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发表于 2011-9-17 13:16
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Current situation) }2 \2 ~4 L0 C/ [: w4 }+ i
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' N5 q0 e& }4 Y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% x1 ?! T! {2 L" \4 w, E5 c
impose liquidation values.9 k1 s K0 m4 ~5 H; O! a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: J& E$ `6 V' N
August, we said a credit shutdown was unlikely – we continue to hold that view./ Z1 ]+ {& L9 I1 H) |" y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 n. e ]% K. B8 hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ }4 [ L. ?, F* E
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A look at credit markets
]6 s6 D0 E# K9 k U- \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in Q$ J! X! Y# c% F- `3 P: X% }
September. Non-financial investment grade is the new safe haven.
o ] X2 `. V F9 S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, k8 C1 m: B7 |; ^+ u4 H
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 Z: C- Z2 m0 `" D1 H1 S0 s1 e9 r
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. R( r/ t; H) y% ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 t6 Q n( X5 S ~CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 o6 H5 P& Z( T' \, ~
positive for the year-do-date, including high yield.
+ @8 J% Q) t' L$ ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, O R/ b' O3 {$ S6 g% `
finding financing.
* ?" x2 ]- E" q9 p Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! A3 z* \6 }, l# z7 x: k( I; @$ p
were subsequently repriced and placed. In the fall, there will be more deals., M- }6 m5 a% O5 X J% f# p! P7 x' S( N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ ?& @) B( N/ i9 b6 pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) T" Q, I3 l% ?2 V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* X! g* L1 [( l1 }9 m/ M, sbankruptcy, they already have debt financing in place.
+ \6 p1 s- A& ?( j' h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) B G+ v: H+ l2 C9 C& U- X
today.) c) H- \9 {0 p6 {& l
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 S( t2 m9 \9 n( | U( v2 R% A
emerging markets have no problem with funding. |
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