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发表于 2011-9-17 13:16
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Current situation
% U6 ^$ R1 c" W0 l4 ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* C, o6 ? `5 ~% m9 A' G6 yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ D! ~8 V% V, D* Dimpose liquidation values.
% Y2 P& ^$ o( z/ C A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; O3 U: g6 U8 B6 s
August, we said a credit shutdown was unlikely – we continue to hold that view.; A5 ?. M5 q- B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ [' C& u2 W8 t/ |" r) z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets. G3 n- h' V+ u+ e
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. F% u* n) s6 r8 i5 s0 @September. Non-financial investment grade is the new safe haven.
. R% B: N5 z/ c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& i6 Q7 H8 j( A- D0 w% g5 L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& x6 ` G/ j9 D% e w/ U7 Fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% z R/ X7 F/ ?3 d* ^( C/ s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 O) f* U8 k8 O8 j" x
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 U7 M5 K% R# {: ^positive for the year-do-date, including high yield.' s8 `2 j) K8 T J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' U4 d, o" A7 w/ @
finding financing.
# N' K: N% r" f2 g- o3 G6 M& J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; v, e. Z- w3 B0 B
were subsequently repriced and placed. In the fall, there will be more deals.
$ X! h! B6 z9 x6 _6 q6 L, x( E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 X2 H) c# C( j& r, O4 y, i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ p M& q9 C% w% Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" m& i! J, q4 {- ^6 f" g- w
bankruptcy, they already have debt financing in place.
0 Q: s V) i* H 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% I& M1 a4 i% t5 {. F& Q) C
emerging markets have no problem with funding. |
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