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发表于 2011-9-17 13:16
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Current situation! p% I: r' Z) g* I" A9 e; o" J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# w; ?& S8 g3 s: C% T; d: h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 f6 o; c3 Z0 m7 u6 o* R
impose liquidation values.
8 ?+ B7 s" y9 q B; B6 f% I* j/ H: q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 {' C6 W) I4 c- v- z
August, we said a credit shutdown was unlikely – we continue to hold that view.
' I5 \* q4 W0 R6 b" Q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ s$ W% x- X& l( n) }4 ^4 jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
8 ~: Q; ~" ^' J# K$ `
$ q& B* O. Q* P: b3 ~A look at credit markets
+ ^0 D+ V* F+ n3 R/ A, V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* X/ C# j7 R0 [September. Non-financial investment grade is the new safe haven.) N) |- q1 i. t+ ^3 D
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( b/ w) t, h% U3 b. W% Y$ l* othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 S; o T# ]5 b3 G. Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 x3 W6 T" a! [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 k! K0 {6 l' v8 ~CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ q( W1 a% n3 i: H' m5 g+ P: t( a- ~
positive for the year-do-date, including high yield.' i" i8 d# t* i! P: o" Q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, h. l$ {) Y! [2 \! T7 V! Lfinding financing.
2 e8 e. K1 i a% Y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 g8 [- ]3 r5 P% U- fwere subsequently repriced and placed. In the fall, there will be more deals.; v- Y" d$ y7 c" n$ u
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" D. L7 u. x! w! X8 J4 f8 J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ M' J! C% k7 X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 l9 t; k! z% H& i
bankruptcy, they already have debt financing in place.! C4 h( ~; r' F9 H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: |) O0 I$ L3 S& {" qtoday.
" z7 D8 F$ H: I5 w+ ?4 z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 t7 z. k, Q: Y! Semerging markets have no problem with funding. |
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