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发表于 2011-9-17 13:16
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Current situation3 U R5 C6 w: S
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( n% a% j1 M' f. l" vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 _8 K) G4 M& E7 C1 jimpose liquidation values.
2 M- f+ U* D) }- v, X! H9 L* G$ } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 N8 q0 F6 e( n$ i' i* ?8 ]2 @( bAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 d5 j& {& f$ I% K9 \& R( A; w The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ l! N2 C5 u. c xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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/ Y( X' L4 e! ^, s. U' w& p* fA look at credit markets
6 u6 ^: F, @/ n" t# F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 ~. _8 N( \. z5 i2 k! d. o* `2 L9 m) }September. Non-financial investment grade is the new safe haven.# {* |& \& u7 d5 g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( }1 `) \8 r4 Y" D* L7 [; tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. g2 V: ?: ?4 x4 ^/ Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& V0 i6 H# Y/ c( w* a' C' Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 @7 X: k$ l3 I/ B u1 h* oCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" G, N. ?* B( u3 ]1 x$ T! q
positive for the year-do-date, including high yield.( E, y) j) E2 z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 X+ d9 F4 g5 c
finding financing.
' _& S8 {5 P4 A# Q' Y- x8 g Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 u# i9 n {- K
were subsequently repriced and placed. In the fall, there will be more deals.0 H# e6 Y' h1 }( i1 |- U* s" D
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ ?. H# A0 ?! X. L9 c Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% e+ ` D6 |* S- M* j. n# Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: _4 _: ` X, G ybankruptcy, they already have debt financing in place.3 P6 @' n B+ n/ d% ~- {6 U+ L! z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 K: X. j' ~4 otoday.
/ m) S8 P0 v& L d Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 g* X( x; z& F+ V/ p0 |emerging markets have no problem with funding. |
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