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发表于 2011-9-17 13:16
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Current situation' g4 y8 C$ |( W+ X! O) i
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( W* D( {: ?. O q. ^, D# u* |) s/ X: yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 }. y( P2 g! T; }! k; Kimpose liquidation values.' D' j5 P& u% c3 I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, f9 c/ R4 k' u. D' Q7 C, ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.
7 M+ s6 d( w7 U; p- n! E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 |3 h0 Y: u8 C8 A$ Q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; P {( |8 Q4 K. U; kA look at credit markets
& g0 o9 ~" [3 V) n2 X4 } Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 r# [. h* k2 h- r5 _September. Non-financial investment grade is the new safe haven.5 H# c1 u, ]- L8 m5 Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) o; g+ S) [3 J- H; v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& `3 B% t# M) g+ Bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 ?; r" l) y8 C' J) f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 m7 V0 c& V( l k$ jCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( f! N3 n) b7 w' R% spositive for the year-do-date, including high yield.8 z; [) B8 Y& G1 Q; e$ }; i+ ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; l" K [- S$ E7 A8 u5 O& k
finding financing.
! `4 N! f% [. |* @1 w Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. b* B7 ?8 c/ S/ w6 v" S
were subsequently repriced and placed. In the fall, there will be more deals.
, [( I( f$ c1 Y1 h2 n# v- k8 M4 d% W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 b% v3 q: Y! S; `5 w! z' w( Z' Nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. F! n7 T5 M; Z# Q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 r# a2 m! z+ G9 w1 ]( J0 X
bankruptcy, they already have debt financing in place.+ }9 ^& v1 A! ?; H' ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- o$ w3 g7 Q- G
today.
/ K8 ?" \" s. W' D, I2 y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! g# a- G- x" d* u! B
emerging markets have no problem with funding. |
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