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发表于 2011-9-17 13:16
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Current situation. g X# B4 J/ C, N% [) Q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" i. W+ E% j# X, Y& c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- i7 a8 r3 ?! @
impose liquidation values.8 F5 D" N4 L3 u) {" }
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! s" ~2 D# y& `7 t0 |7 j: y4 K7 E
August, we said a credit shutdown was unlikely – we continue to hold that view.: X' \3 S `' Y/ z; q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 s8 u1 ^( y: m2 e4 Iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 @# Z6 c! B) A% C2 u6 s# x
" E' o4 y) ]* u; u! }% {7 f8 sA look at credit markets
/ b4 `; r! |" L/ c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& {5 S& E/ d4 }1 j6 WSeptember. Non-financial investment grade is the new safe haven.7 S+ t7 u7 E9 u$ L- X1 Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 i4 x" h4 {$ U% M! y4 b- _# y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- b! S6 |, \3 w8 d) s+ ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
5 e& A8 R" F( [2 i! a# Laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ V3 }1 I5 a; ACCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 C. Y( Q @$ K: S* tpositive for the year-do-date, including high yield." g4 ^" ?% Q2 ~; S* P2 g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ p" g& X; D5 I$ g$ ~' sfinding financing. `; V% W5 j8 c, r! M5 c; ]
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& A: M! h2 M0 ?7 D- ?7 f( uwere subsequently repriced and placed. In the fall, there will be more deals.# Q6 A5 A ]% X8 a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' _2 S% _" w7 E6 S
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ u7 c8 Y; O7 L! n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 ^( o( N8 \6 Y S ~bankruptcy, they already have debt financing in place.
( V+ h6 Y- |& J9 d- [8 y# U2 _ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- r! c" j) \1 F. |, ]
today.
0 R( K+ S3 O$ b9 X3 {0 Y k, m# O; D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
m7 Y2 V3 a. A4 oemerging markets have no problem with funding. |
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