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发表于 2011-9-17 13:16
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Current situation0 r( W) I" s5 y, S9 S6 A! p
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 P8 |: c7 e4 u4 I& m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) [) k0 P6 a Oimpose liquidation values.! y* I8 G$ e8 m3 H c
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' ~ W" T& o( n. p' v3 [/ KAugust, we said a credit shutdown was unlikely – we continue to hold that view.0 c& p$ S6 [9 B" A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ u3 K" B, u7 V$ r( |/ K! z: a+ `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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, B- W6 T$ J9 E* s: k! SA look at credit markets0 F* g+ \3 O( D$ @& \
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ ?9 B7 t- a/ G7 R; g$ v
September. Non-financial investment grade is the new safe haven.
/ h/ l# Q; _3 q7 I High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ l7 V; `$ T: w- J2 L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
C/ K+ f; }8 Q8 W" \billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 e+ E- K x- k2 o: j" X- s/ haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ H1 O# b3 |$ m7 i' o' j. C. TCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 M5 A" E& E+ U2 y/ D# ipositive for the year-do-date, including high yield.
3 L# ?; r8 b' D) ^) G2 a2 @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& e" a& ~6 P& G$ f- L5 Cfinding financing.+ {! D3 e' ?& \4 L) y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
M* S c; {. f2 P" dwere subsequently repriced and placed. In the fall, there will be more deals.
' U& n1 A6 ^# p: U( ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 a7 [% |9 T7 B, g; H7 D5 Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 }2 W4 Q; b7 D1 ^; q3 egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' g( @; \6 B5 B5 K0 J+ s
bankruptcy, they already have debt financing in place.
, n ^" E, k m% x; K0 }$ U European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 k+ c, b6 R3 Stoday.
# C( L- c, S2 L! N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# Q$ u7 T K5 e. e3 _* ]$ Gemerging markets have no problem with funding. |
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