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发表于 2011-9-17 13:16
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Current situation) v9 n/ }/ e. S$ e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: l! ?+ O6 Z' u8 I, a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; i% N( @6 @; Z/ e) t) {( W7 uimpose liquidation values.3 B$ q G5 U1 l. \4 [. @& R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% z" p a O2 ]+ Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 X9 ^0 K2 J, d1 O& R: s' T& ] The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- `) a! w z R2 o* A# }& T
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
4 l% Z" h" C" E, R
% ` O9 ^$ L5 M! @5 [A look at credit markets
7 V( _9 g0 g& d, c3 \" Y, z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ q$ v( [) w! A4 p8 @2 L2 d* NSeptember. Non-financial investment grade is the new safe haven.
' t U6 K8 D5 m% J) Z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 ^" E3 ~9 q2 U; s6 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. r9 c7 T/ y$ D6 j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
]" }5 J" A# ~/ Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, D; n( z/ c ~: N P3 tCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ `6 E) k2 G9 d; t
positive for the year-do-date, including high yield.* ]7 ]* Q2 t" k1 [- e; H
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- I# m3 Z! z( M5 G3 c% `! f
finding financing./ q9 b. N. ]' {# _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" Y6 Q( e, q4 {2 Ewere subsequently repriced and placed. In the fall, there will be more deals.9 O7 s; M8 \4 B; F, e+ q3 r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ f* ~3 o4 V" c* _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& B1 E. D: A* h F3 O( |going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. p8 Z* V5 L% |: F: |- ubankruptcy, they already have debt financing in place.
2 U9 \& y# \$ b8 g6 a European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 q3 {' X) g1 c* ?9 H7 j
today.* Q- ?8 |; F; c" w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. T, A1 O+ B( I4 @- i' X$ ^5 X
emerging markets have no problem with funding. |
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