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发表于 2011-9-17 13:16
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Current situation5 x/ }! q- P# v3 f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 P4 ~) X5 c& H1 A. P$ u, N" U' Was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) T$ V+ Y2 B, g0 r6 l4 jimpose liquidation values.+ v/ U# ~8 q$ W
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" ?$ v% J/ q: n) O! {+ X: ]August, we said a credit shutdown was unlikely – we continue to hold that view.
1 ?; V/ i8 b, ~, L# B* k( \ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 }' q# P8 t; X. u( ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets! K4 Y& A' N6 j0 M* N3 r, b! h' K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in& ^: z5 C5 N; C8 K ?, ]
September. Non-financial investment grade is the new safe haven.+ `3 {/ n' i% e9 A' q' N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 [$ W, m5 T' E1 }8 l; ^0 y- A8 Gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! i/ K0 Q/ U: z9 F5 l% p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 z, F2 z% i2 `2 Y8 D1 _; W9 n Yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ i4 ]% v; z1 c b
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 t2 I# A: W6 O# j8 a
positive for the year-do-date, including high yield.2 h g! G. d+ e. M& P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 M2 v& _ a: a* ]+ d
finding financing.
* h, [0 ~6 R) \' J+ O Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 @- v4 {4 j& R2 H" T. Jwere subsequently repriced and placed. In the fall, there will be more deals.
% g$ S- B8 y5 k& s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 e, j7 z2 _* K: O; Y, }is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& }& e& s9 C J# z: _, M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' r% F' J0 h. P0 W. [) O
bankruptcy, they already have debt financing in place.
$ v2 g2 x" g' N2 x' | l: F( w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; e h* f; `; w2 d$ Y. h* [emerging markets have no problem with funding. |
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