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发表于 2011-9-17 13:16
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Current situation, W% J; _! q& b8 t3 X* c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* o8 |9 s. b! u7 Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) o8 ^0 i8 A8 I
impose liquidation values.. a+ f& N1 {. G1 z8 X$ J* n8 v! P& Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 [7 W4 {; \* q+ t6 |( YAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' W( e! F% U. c) o9 ^/ M, [1 j The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* I2 d1 u' o( i4 w, {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; M) {4 v! h* y: \
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A look at credit markets& y7 e9 v3 q5 W: F: s# q" g. Z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, n" a" H$ f8 ~September. Non-financial investment grade is the new safe haven./ x( O$ K2 S: L% c( Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" x/ g' q$ N, w _0 E6 p2 M; B; kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% v, i$ e7 d9 g9 ` o' O' obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: {4 \$ s. \& k. z/ @6 gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ Y' B, w+ |" H3 @2 B6 b+ X
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 ?7 s4 B: l5 I G/ gpositive for the year-do-date, including high yield./ A& {) K8 e/ p3 N% q! b+ k
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 L8 Z( ]: N# P" c$ ~# [
finding financing.4 g" G) k- \ ?: o6 G$ F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- F6 e% e, v9 D) Y
were subsequently repriced and placed. In the fall, there will be more deals.
' I1 V5 x/ t* y* H Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% z* i, r5 K. {# jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 {% ]: K; C* qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 [8 g0 F4 ^2 M5 x
bankruptcy, they already have debt financing in place.+ E% h8 @% T* ?
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' Q y/ K6 U+ c" S/ S& I; J6 I& w
today.
2 j% z( ^4 n4 }! b A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 B6 T6 {7 i5 T( T4 R4 Bemerging markets have no problem with funding. |
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