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发表于 2011-9-17 13:16
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Current situation& W$ N" B- N$ h$ c0 z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% x' B0 D9 B( r+ `0 p1 R0 yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- G/ r& E' Y8 Q" U2 `
impose liquidation values.# X0 C2 ` m$ M$ T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! ]3 ^# F* z& j1 q; M2 k1 b
August, we said a credit shutdown was unlikely – we continue to hold that view.8 S' s" K" g% T6 P \. \3 m2 ?
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# o& u4 ]3 q( X6 H+ G6 X' w( y. Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; L2 c/ K! `' V; B' d, K: f/ qA look at credit markets7 `+ l: m2 {9 [7 p) v
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" X2 _0 h: a' `9 o
September. Non-financial investment grade is the new safe haven.
" Y9 A9 a" O# d$ M: z' k0 P/ m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* Q: x. ?" m) K& s* l' w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ J, b3 N$ l% F* A5 n% @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
5 x" s3 V9 c( l+ l [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( |! U+ ]4 Z4 a' h5 B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% _/ H: I4 t. w
positive for the year-do-date, including high yield.
- @, ], r, ]7 Z0 `3 N! X! G% k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! Y8 H! z6 a' @ n! D! ofinding financing.% k2 J5 `# c$ `. T: Q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& f8 ~& q+ I, K N( v8 Mwere subsequently repriced and placed. In the fall, there will be more deals.
+ ?: H; u4 v/ c Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; {. B7 c) G4 o% H# L6 H9 b* Ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' d8 }4 t" r9 y; h# S& Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: r4 `- v% t3 Z. V! p2 @
bankruptcy, they already have debt financing in place.
! `+ c* l3 R% B( U2 g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, c: p) N5 g3 k; M
today.+ |4 z: ~9 d% ]+ U& s5 T* W+ x
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 O+ P8 L; q# N) v7 _! p
emerging markets have no problem with funding. |
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