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发表于 2011-9-17 13:16
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Current situation# e, K r( P- A2 I: u6 F
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. L# n b9 S1 @2 Y( h1 y, @9 S( eas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, P, D. j+ g. O5 \+ B
impose liquidation values.* D# _3 ]; G6 K" n, l$ `$ V9 d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ \! S# U% D3 \4 ] f+ j" }August, we said a credit shutdown was unlikely – we continue to hold that view.5 l m/ G* C9 u
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! }& R% k/ G" p7 E4 T( Lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 L5 f$ }) l& \& ^
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A look at credit markets
! \5 W _1 b9 O8 Y% f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# e3 w! e: r' Q* TSeptember. Non-financial investment grade is the new safe haven.' n6 J4 g3 F0 p2 E7 _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% k' W3 P( s; h# R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 e3 r3 R6 b' v% K. E* m3 pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 }" A2 ?: E: j @) A3 S1 N6 B8 u
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 w2 V O5 q4 J) ]! ^0 zCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. ?9 U- M% H L1 Ypositive for the year-do-date, including high yield.. c8 x+ Q0 |+ \
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 ?6 d: n# _) |: g o8 S$ bfinding financing.
- _1 m: c9 C2 Y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; t& r, y L/ S2 n, ~" ^were subsequently repriced and placed. In the fall, there will be more deals.7 U* Z- x8 c# W7 H9 F. l5 e
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 Q2 ~3 z$ B9 `, k3 {, t; K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 `% S4 E* Z2 `- g! U: n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' T7 W4 v2 Z) S/ D0 m
bankruptcy, they already have debt financing in place.' K7 L& ?5 t8 s+ `+ G& ]5 N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 ~; w+ p! E2 [2 z1 Y0 m8 qtoday.
7 J5 l2 S4 J) D( \7 }5 G$ ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: A) f( q+ o' X9 X7 S0 R |) [
emerging markets have no problem with funding. |
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