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发表于 2011-9-17 13:16
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Current situation
) O% W0 n V& b4 Y3 ?8 ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) k, x$ n- ~) c. `
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 J6 v- p0 \2 X$ ^/ W. P% y5 i! Nimpose liquidation values.3 _$ P" {5 ?# X0 ~# m# \
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- {. M4 M: A7 aAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' V6 T: v% i7 \ P6 B2 M2 m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 r( m8 ^4 U: f) mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
, ^" E8 l6 K# Y) j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. Z+ n2 j7 u; r. p* k' @- p% GSeptember. Non-financial investment grade is the new safe haven.
/ e m( c" C' c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% a. J! b7 K8 ^- Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& S* h% O3 o4 Z3 L
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 `2 c$ T( h& l0 x* P% d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ r' D+ l4 J8 t! m" P/ s- X
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" U: U: \. [- P! M
positive for the year-do-date, including high yield.# Q) Q- e) }6 ^, b/ X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' U+ ?) C& h) `1 C+ @! Pfinding financing." M) T% M& R- h0 J7 S. T( {: _1 s6 |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( p9 u4 Q0 u6 J9 D+ S" ^; d5 lwere subsequently repriced and placed. In the fall, there will be more deals.
- O) s, M3 z- d3 M4 r. Q' [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ v. f' R% M# M9 P* X0 h' b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* a2 j9 N8 j6 K7 ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( [ y3 k/ ~+ _4 t: k' ]8 Bbankruptcy, they already have debt financing in place.
: @6 E1 q1 d, R% D" g& P* r1 \7 h9 j European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, Z( i% r6 C9 A2 E# |, vtoday.
, |. X5 Q" ]/ A. t6 n1 x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- B! |7 [% t7 xemerging markets have no problem with funding. |
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