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发表于 2011-9-17 13:16
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Current situation, u1 p' z/ e* S" O! j" `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 Z6 f: ~6 Z+ f. W. y- Z9 qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. p% n* A/ v! W8 a+ X/ H" Nimpose liquidation values.# |( S9 M$ M& C2 H# H
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 ?7 H! b& c4 }1 N& [. ?" q; c& {
August, we said a credit shutdown was unlikely – we continue to hold that view.9 V+ [ B5 w( I a* V! x, \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ C3 G7 v+ B2 n" H% p7 \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets- D7 n9 W1 V+ T2 \$ U% l1 R$ n2 c! l, g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# _; ]& Q) L% h- {- I! c4 B" Q
September. Non-financial investment grade is the new safe haven.. I8 P) ?9 N9 v9 _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( d3 x: {* n1 v; P# e2 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* g7 n% i3 B, q2 E4 A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ B1 N, V0 k- o& F0 F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. `8 [( @$ ]; h3 c% PCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 P7 x& T( J4 t" L' S( N
positive for the year-do-date, including high yield.5 d8 M0 h7 {8 X/ F: V7 `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
^3 u+ m5 b- u4 J/ ^finding financing.
8 \6 ?! T# e: w y" V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- U' z' [7 K' g* c6 D. `were subsequently repriced and placed. In the fall, there will be more deals., R, N" ^) ~! h \& x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 W( z: T G+ V! m8 d5 Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& b( }4 ]9 d3 E+ i% C
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for M3 V: M7 ]4 n( J# N
bankruptcy, they already have debt financing in place.
& L7 a: b0 B# c8 O) c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 q% C1 |% B1 R. u" O0 f- rtoday.
! q! V' v- e6 G/ } ?3 j Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 G# f- I/ L$ {! w- [8 T) Zemerging markets have no problem with funding. |
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