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发表于 2011-9-17 13:16
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Current situation
; j( G% E, s( M. c1 a+ ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 Z9 x& M. J0 A, }" f. t+ ~* @- [
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' B: x3 t. `+ ], k gimpose liquidation values.( R8 I/ i# Y4 k7 o! C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 m t+ s& y+ i! H1 A8 DAugust, we said a credit shutdown was unlikely – we continue to hold that view.7 h1 a* p1 E, _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 I* a: y I+ k$ C' |3 H! escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
: V% F$ z$ K. a7 c( r/ @' d Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 s! r3 i3 R& l5 K" iSeptember. Non-financial investment grade is the new safe haven.0 i& H5 [9 J7 j( b# v h
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& Z/ V8 X* B, E9 D
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' }7 `, \* Y- K3 ]' S. {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- M8 f( u1 R$ E* c* O6 daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 R3 Y) Q; ]) `) \" D, ICCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! U! O8 m, T# E. k! q( b' p
positive for the year-do-date, including high yield.* }) D) q/ Z* k2 U1 Y% y5 L
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: C8 l: K+ z( q2 }0 l {/ Z
finding financing.
3 g' e# q: p& ]' z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" u# C) k- H) L: p6 R
were subsequently repriced and placed. In the fall, there will be more deals.
. F/ {8 M& q( G7 w/ I Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( E- B8 b1 J# |5 a( x
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 N+ C* ^* k i0 U/ N1 lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# n$ E9 |1 v+ j/ Q% r/ Q* Q Q
bankruptcy, they already have debt financing in place.$ y4 C1 T- Q+ `
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) I: w5 X' r/ |# i) z- ltoday.
- [& h, {2 _, O: u$ R) o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ S% L4 H6 l) X, }
emerging markets have no problem with funding. |
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