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发表于 2011-9-17 13:16
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Current situation' |7 Y5 D9 V( [0 {( S2 B
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ K) k$ [5 j/ `as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) U! `4 N0 D3 ?. ~# b0 Wimpose liquidation values.
% @0 g0 T* s" U% X. C# k" w# T3 W In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ z: y) v" n6 G& J+ l2 y3 B# S
August, we said a credit shutdown was unlikely – we continue to hold that view.9 V% s1 d3 ^ B- c/ m3 \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ f% u$ H$ @) [: dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
, o4 t, g7 M( T8 Y$ i; R z. H Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, q; N4 p% V- y- B( q" S
September. Non-financial investment grade is the new safe haven.
6 ?9 A, w3 k! H/ ^' Y# `- n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& T( y3 G8 {1 ^2 H0 g' Cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- w0 I8 p7 I3 b+ Q- t$ I1 a
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 X. }* ^: P( K& n/ m& @- b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 h6 n! b9 a0 w2 x
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" A1 O3 |2 P6 C+ O% E
positive for the year-do-date, including high yield.
# j0 L0 N, A" j. I5 z) X! @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, d }8 ?8 G" B8 |. i# ^! x8 \
finding financing.) S/ a. l) D6 K7 Z- x- w' x2 I
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! C. N. _* u6 w$ S
were subsequently repriced and placed. In the fall, there will be more deals.
2 R" a6 [- T8 k Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 R! n; K7 C; F$ n
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ G9 V: b! m/ ?, H$ Z$ m( kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 G$ X) O! l+ C; d# g- d
bankruptcy, they already have debt financing in place." w: X, P; ?* I* P! _( ~/ G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! ~' c# | b* A) j d& Z# i8 \today.6 M5 g4 L! c4 Y4 O. s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 m; _, t, h* m# _
emerging markets have no problem with funding. |
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