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发表于 2011-9-17 13:16
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Current situation) G" U. }( J+ f3 I0 J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 ^& N/ @6 _0 J: I3 {8 c$ p
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* {4 P( v s9 o% `9 H* L1 eimpose liquidation values.4 |# t v8 l, s" z% Z% X8 G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 E7 v1 k1 ]& V/ B6 G, ^7 a! t3 s
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 A+ e1 \" |6 p( T, C The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! E3 x$ b; t0 H! S4 \8 G; N0 _
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- s1 L( Z y& i7 S4 DA look at credit markets
0 l4 ?7 k: ^( x; W" y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# S2 T# g& R& Z2 V( ?September. Non-financial investment grade is the new safe haven.2 K, R: I F6 f0 z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& Y6 O! A% ~& wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ S- W% _$ Z Z! cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* B# D# O r, U+ c+ T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 B% H2 ~; q8 U: ^0 _CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. r0 v7 D( S: ?0 I' X/ X$ X
positive for the year-do-date, including high yield.
- |; ^0 W; f- B' E( a0 O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 Y9 {0 |/ ?4 {finding financing.
l& I% Y. k9 B Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" E: T- B9 w' V7 uwere subsequently repriced and placed. In the fall, there will be more deals.% U& o- {7 s% ?$ }9 I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" @5 H% S7 S6 I' |is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 B& F7 i; G, h+ B* B O1 rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% {5 r8 h3 A8 ?) H
bankruptcy, they already have debt financing in place.6 C; @( N0 S6 X& ?* J
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 ~. k3 y8 l8 f1 z6 Ltoday.
; Z) C. Y: B- F0 W1 O) ] Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: [3 H; |& y. c: l: x
emerging markets have no problem with funding. |
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