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发表于 2011-9-17 13:16
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Current situation8 n) A. E9 N b8 _% h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ P+ @2 K2 X% z5 Q s* \0 S$ Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 F) C1 L; C" @% [- Oimpose liquidation values.% n0 p0 U) W! u6 |* Y' n" E' _3 v4 S
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- p& u* N% ^; U5 DAugust, we said a credit shutdown was unlikely – we continue to hold that view.! |$ p* b7 t' [7 k7 _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 L5 v( D& A7 Y' h9 ?scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 ~/ Q9 q( k8 D: n" b8 H
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A look at credit markets
0 }2 |; t; }. S, ?$ ^0 A w) k Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
r% o) n& N, G; xSeptember. Non-financial investment grade is the new safe haven.0 f( g( ~4 J' R# b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 s1 X" c7 U Q! m( ~- T- E" @$ ^then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ f0 \/ @4 O" z; H* gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ Z2 M7 {7 h) ]- p2 U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ D6 A2 {6 k# ECCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: Y# G! ]* q1 ^% v' M# D2 |$ Rpositive for the year-do-date, including high yield.
- N. ]5 F$ g" f7 f- s0 [ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- y! ~& A. x% {) [4 dfinding financing.
! b7 t1 }. R5 G s' H7 x' G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& M3 S& f2 W0 U3 f9 a" G, iwere subsequently repriced and placed. In the fall, there will be more deals.0 ]9 B. m2 k* I) `# B. c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ l9 b; t* o' U0 \& P$ yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 V% |) j8 ]! f7 c7 _/ \1 mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ Y d+ q' z6 v0 j6 }. [bankruptcy, they already have debt financing in place.1 E( {, {7 q& l* }1 h' m) K6 {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" O- |/ i8 a! x
today.
7 z# U- k: G' {: p' Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 g. b9 T2 I/ ]+ i- {) Temerging markets have no problem with funding. |
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