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发表于 2011-9-17 13:16
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Current situation$ G9 t) A; e, K
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 b% u* X' o2 f) {/ G: ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 l4 _. c/ ], Jimpose liquidation values.- F6 ^6 |4 z& ]7 u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. Y w z% i9 q& c" |; U+ ~7 jAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" O: t$ q. F( O" B/ t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 n3 H2 b1 C* V' N: c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* c, ~7 a3 V2 @
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A look at credit markets% D& ^9 r8 S9 o( j+ z" M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in p K" S+ \6 I+ p8 X4 A
September. Non-financial investment grade is the new safe haven.
8 Z* w2 |! Z+ ~8 b# n7 o+ J High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 C! w( Y! J7 C% O. Z- _! vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& m- J$ {" l+ u8 cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* B3 w& J1 k: @9 d% E% X
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% w2 O" o2 H' E( |( j3 f# _) e
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. L* `9 t7 u, e F4 q% @" Z
positive for the year-do-date, including high yield.; p, i: d1 }" M4 Z, w0 d( h
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 h( _ V4 _ m# X }- \9 ~" l% vfinding financing.
# F, M' x& d9 v w. i! ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& [# m8 x$ e, V+ Wwere subsequently repriced and placed. In the fall, there will be more deals.
# Y# a, `1 Y0 q( H Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) q9 ^* }/ q' c, N3 y5 pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 @" o3 p8 Z( z$ a# u& {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 z( t2 g! W7 T( K$ {
bankruptcy, they already have debt financing in place.: y- q% t1 e3 u& J2 U9 a5 D) t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- p: Z- M" p: o0 b5 @) m, Utoday.. |& X1 U5 V# T2 N5 f% ~9 J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 @9 i/ h2 }" R& O: kemerging markets have no problem with funding. |
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