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发表于 2011-9-17 13:16
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Current situation" a, e0 V) w ^ |$ T0 `5 D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 Z O) A" \/ O4 l8 ]+ gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% Y R0 c) N) X' e( N/ N$ C
impose liquidation values.
1 E; ?* I* U' Z; q, ~+ a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; h; v( P Y" T( |8 v
August, we said a credit shutdown was unlikely – we continue to hold that view.+ z+ V( I9 ~3 E; L2 @/ z6 y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; r+ D6 ~6 {0 E: X2 Fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets% F/ w C) s5 k5 z1 r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( x; I5 [" U" N7 p7 e& |1 wSeptember. Non-financial investment grade is the new safe haven.
( o$ _ s- l2 H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 Z! W+ c4 g3 F4 v+ C' d+ p9 ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 o* C' `3 @9 k% t9 h6 P9 }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ O5 F% d: N2 d9 @/ C
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# Z: N' T, ^" s$ y* P6 ~* SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ W* K! a, N3 h1 f9 x3 q
positive for the year-do-date, including high yield.
7 a* N2 b, ~+ ]7 A4 V4 ~; K6 H Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% U& [0 v/ y, F( u- r8 U3 d5 }9 G3 U1 wfinding financing.
( ?. J) R. M) n0 [, I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 ^, {! r( T- t1 D q
were subsequently repriced and placed. In the fall, there will be more deals. Q( t- G$ k, D4 {2 N% d7 W
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ f0 x9 \6 q" ]: j, y/ r2 Nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; z1 I4 |, h. b# e. b6 Q% K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ Y1 P8 o5 O* c% O5 K: A
bankruptcy, they already have debt financing in place.
/ {$ @. t P) H9 ^7 D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& U! v' p! e$ L7 Z6 _8 w" rtoday.
+ H- G6 u- o6 v; {* s& I! k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ f z' t. G w! g' {emerging markets have no problem with funding. |
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