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发表于 2011-9-17 13:16
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Current situation8 ?( V* m) z/ S0 [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! ?& V9 c D b( V5 o( j: I! ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: [" f) n5 {7 R4 F0 H# n( e
impose liquidation values.( X# }5 R( H& c& ?- u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& ?- N; i# g9 t$ |
August, we said a credit shutdown was unlikely – we continue to hold that view.$ T8 _: p7 T2 k1 `7 d9 ]0 O& r
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& m) @3 v, R5 y3 H
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- q8 P; H$ X& t$ m* E
/ Q& F4 E5 J2 A1 RA look at credit markets; e4 \+ |1 k9 P2 B7 {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ c, E* d' v$ ~ v! C, d& @. m
September. Non-financial investment grade is the new safe haven. K# ]8 ~( D) @. S7 K' N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ c$ s6 l* y7 s/ a: B7 dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& F) q2 e0 o8 y: E# ?billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; _, K3 a3 E' B" t& e# M1 Baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 M$ { Y; O5 k( _) m# @. yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; w5 s5 g9 z* X
positive for the year-do-date, including high yield.
. V k' f0 p1 d3 m* {; N# K0 G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' m u& N$ x# r) ?% }( ?$ e+ Ifinding financing. D T; y* |8 L1 Q; c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 |7 H$ E+ F3 u' m; G1 Mwere subsequently repriced and placed. In the fall, there will be more deals.
' a9 o; S) q" H$ e Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% ^7 I- ]1 O x3 zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* U# Y0 Z# ^3 b, x, u) Cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 G$ Q& a6 R! ?5 rbankruptcy, they already have debt financing in place.: \4 s$ a; Q. o. S6 S; S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
j+ [8 n9 i9 ?( L2 K9 }: Utoday.
) e3 A6 t+ f$ Q. U. `6 m) c/ A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 |& o# A6 B; e0 Q5 T
emerging markets have no problem with funding. |
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