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发表于 2011-9-17 13:16
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Current situation
7 s" V; c; F1 X# m4 M) r# { The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% t1 \/ Z/ E" t, t" M% l2 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! h& P! Q. F& [3 h6 A9 a2 pimpose liquidation values.
% M5 k- w1 I9 ]* @: ?- _ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ l1 ~0 [3 f& d2 R6 V6 I
August, we said a credit shutdown was unlikely – we continue to hold that view.! v8 o/ G% ]' I, T" I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 R) v$ F6 Q% q% b$ Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: Y# \3 m! y2 x$ j U
E6 d5 X) W1 {2 |7 i RA look at credit markets7 r+ ~4 b7 B8 {8 {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& p$ P, I' g3 I# i- n9 y6 bSeptember. Non-financial investment grade is the new safe haven.
7 y' ?+ t% [0 k/ ]3 _/ i/ Y0 _. d- [2 O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" a" o5 X I# x1 j, A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $13 S2 I8 C H7 L3 r9 Y: X- P1 Y2 K# n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; |: X7 j( c/ I2 C- D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 P8 C! |$ f2 |/ A5 H3 rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 G" i* H: g0 b& G/ `' ?positive for the year-do-date, including high yield.
. G3 E+ ~/ ~' d4 w- C7 U7 l) z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
8 }# M5 n" b) _% P' Yfinding financing.7 L3 b% l% Q! T; y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& c9 h0 O* K0 d4 ]6 h/ X/ Cwere subsequently repriced and placed. In the fall, there will be more deals.3 q2 K0 N" ?* k/ x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' z; x# n7 ]) l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- A$ c% \7 _% I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 W. A- {4 e3 B
bankruptcy, they already have debt financing in place.
6 b4 y/ S4 z6 Z+ ?4 B) V1 J9 { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; b8 N {+ `/ \2 s+ B J9 l- H; S
today.5 j- V% A L% D( W/ {' l
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" H D: e' L' z. x) |/ n2 f
emerging markets have no problem with funding. |
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