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发表于 2011-9-17 13:16
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Current situation
, C' B b9 k9 R) W( ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 r) r) b! \: p6 P) cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( s, V% J7 ]6 Cimpose liquidation values." m9 a. x; s9 i( E- G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 I! U; c" T$ M9 ^1 x; z! b2 LAugust, we said a credit shutdown was unlikely – we continue to hold that view.) {$ F; m- ?5 ?- i8 Q$ F3 @3 |
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: X8 r" Y5 y8 w2 y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 w/ {0 ~& q, h0 R
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A look at credit markets
} [; |6 f. Z7 o Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) u* z# C" m) z. pSeptember. Non-financial investment grade is the new safe haven.9 M- S2 r& j! |2 h* c
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% F" s4 O# P/ ?3 E) }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; t0 R' [* I1 k; p6 O0 I
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% u* k, x! L$ N3 i1 U0 S% c; F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 Y- l8 [, h) O/ K6 KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: _/ G( `; L+ q. U$ B
positive for the year-do-date, including high yield.) P8 x6 u- |; U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* ^4 N1 p3 |3 {finding financing.8 f& u1 i! G* L- b4 J F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; Y0 V# U3 m4 b3 E
were subsequently repriced and placed. In the fall, there will be more deals.
' `1 [3 t2 J# m. t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 `7 m$ Z" d( R" J& c# C' \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 r/ f' R" _% V, i
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- ]( ]/ Y ^9 a' Z5 d# c, u% nbankruptcy, they already have debt financing in place.0 a: ^' w( y1 z% l$ c8 R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) S; ] v3 q/ m
today.: m' |* L' m% H$ T, p! d* n' u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: I8 }7 V) g* |, Wemerging markets have no problem with funding. |
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