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发表于 2011-9-17 13:16
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Current situation9 C G" L8 E' G# O, _2 ~+ k
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; k4 ~" V/ V: F
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, G& v# j; w& e' Wimpose liquidation values.
0 N1 G4 L0 [1 [# B* v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- l& k8 |- a B5 i
August, we said a credit shutdown was unlikely – we continue to hold that view.5 C; r( l" Z, N6 C+ d, U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* Q7 I# y- D6 v: y) Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 F( E3 M' i, e7 s
# P' A- m m* b$ r4 |& l4 l0 jA look at credit markets& l6 d. n7 U' n* Z' M$ m' ~1 |
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* U* E0 j# h7 `; \+ L& t
September. Non-financial investment grade is the new safe haven.' d2 k9 Q5 x" R( c/ @# K5 ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 c Z+ A$ h. v+ z6 U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 K {2 l7 `1 t4 K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- ~4 \$ X6 y ~! T# Q% i
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ S4 a# ]$ J' |* _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 y% T6 ^6 v; p& t
positive for the year-do-date, including high yield.
) u3 D* ]" f/ A( Y6 x" z- d1 l Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% w4 e! c" A5 j6 e
finding financing.% d# p1 w3 h/ k1 J7 K5 d: V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" U! m% ]/ h* Pwere subsequently repriced and placed. In the fall, there will be more deals.
3 n; v% _ c7 V6 o Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- R4 `! T9 b- Q* k- }. [! B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ k" k6 O4 v2 d; fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! q* W8 ~2 C& D$ u/ z, h+ ~bankruptcy, they already have debt financing in place.: V6 S" n5 u. [+ ~! U K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. `& D0 j$ }) S( {
today.
: {4 y; b# J7 {3 q! h/ W! d Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; H, o# p' _% u, {9 lemerging markets have no problem with funding. |
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