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发表于 2011-9-17 13:16
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Current situation
% V0 r5 k2 |9 S$ J! ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 P' r- l9 R: h* [3 T- M+ \2 Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may* o8 [& \& K' W3 d
impose liquidation values.+ Q" l$ i2 A. e% g7 }! a# d" {5 S
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ X# N. L+ Q, W8 W S
August, we said a credit shutdown was unlikely – we continue to hold that view.
! y+ y6 l5 q4 z: M2 Y- x& U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension- s; B& b1 L- ] I9 e X) K& `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) ^1 n1 z, d: N; E. A5 ^- N) L5 {
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A look at credit markets9 g; |' ^# V0 x
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 c9 C5 K5 n3 m9 [9 V# oSeptember. Non-financial investment grade is the new safe haven.
: o, q1 {5 P1 b3 w& Q. u' \5 {" V High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, |9 A7 g( S s( Ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! V, n1 ^3 z) w% ^
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, g3 V+ }5 N2 o9 a9 u: Gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- K9 Z# W1 ~: o7 I H2 P
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 _* b; p9 C/ |7 n! ^+ h* y
positive for the year-do-date, including high yield.# u' J6 ]" o4 c# K" O
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, Z# W% f j: }finding financing.
& k, [- T4 d6 V" g' E7 C Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% I+ ?6 x1 [( m& W5 A" R: U
were subsequently repriced and placed. In the fall, there will be more deals.% O i# B( j1 S2 N0 F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 Q, C' D6 M% S2 y3 Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: x' c; L8 c! E* Z* L: Bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& _6 v0 V7 Y8 G3 @, p
bankruptcy, they already have debt financing in place.
# G$ F- H t& a9 @2 r, F- R European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( a! @! {3 f, S/ T( h7 O4 Rtoday.+ {3 }7 z( D' Q9 P6 [
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: g) |# }9 O* }! ?6 P1 r
emerging markets have no problem with funding. |
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