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发表于 2011-9-17 13:16
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Current situation) J; W+ ]0 Q" B+ G" v
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- s/ H! k# C( |3 s- A' Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" N. I; l) n7 v* ]4 ?# g& q
impose liquidation values.0 ?2 ~: Z7 W3 o' A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 Q) u: F# d6 u+ s$ y
August, we said a credit shutdown was unlikely – we continue to hold that view.2 a5 W) b% ~. k; Z. _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 G7 q) M2 G7 Y! J5 h4 ?) e
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
6 A9 N" Z( Z2 T" _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 g) L& ^4 J( i, d! X- s
September. Non-financial investment grade is the new safe haven.; }# c0 T& [' C3 k' k- g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& X4 |* m# L Kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: v) x. @) S6 h7 Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( V0 g0 l0 y7 F+ Y6 caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; H6 ?9 S8 F( ]6 V' gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 d0 D5 s H% f( Y( ^positive for the year-do-date, including high yield.
) H: W( l$ ?( S& a) x3 p3 E. e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 h1 W) p" D/ @# k6 D% T
finding financing.
& K0 d. G8 ^# \' F# b6 W Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 r6 P/ L& b5 f' vwere subsequently repriced and placed. In the fall, there will be more deals.' c! W0 J/ C% @- P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ M, K3 T& h9 Ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. r7 {5 L: L# v3 ^% C$ Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ E; Z- r% {8 {5 @. V( Pbankruptcy, they already have debt financing in place.
7 o* C5 o6 S/ q/ Y% |, \ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ F+ o, C. X4 S- I# }8 _1 L5 Otoday./ k, d: _4 z' }, z) b D) W$ `0 |
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 Y7 F* X \( T. `# B" U! \& ~
emerging markets have no problem with funding. |
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