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发表于 2011-9-17 13:16
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Current situation4 s, u% n. A9 l7 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# {2 l! M# b3 W" {
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
Q# T5 P6 S1 eimpose liquidation values.
% l: _- c2 \1 g) r% K$ W% |9 U In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( p/ ~+ q* C/ O3 _' z: M# h
August, we said a credit shutdown was unlikely – we continue to hold that view.. |; e+ l! @5 C- K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 c% G) p9 h8 }7 Z" ^5 [; \5 Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
9 n/ |3 @! E) U- | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 b* O2 [" C( m9 d J
September. Non-financial investment grade is the new safe haven.! E' ^. D. C" k: V
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% W, q! Z, n0 n7 @* Qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! T" Q( G- K/ u0 D% v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( c8 ~9 S5 h, w; Raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# X( y' ?; x5 O6 JCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" E6 k2 ]8 o2 ?+ v; _* h. }8 Y; A* g% P) ^
positive for the year-do-date, including high yield.6 @4 E+ Y4 E" m+ v8 y/ c; A
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 m" N: T7 D. Q5 u& G
finding financing.5 }1 y) {2 H& v$ n* q' w1 q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 {1 _! o3 \( \0 C/ [3 e& e0 F wwere subsequently repriced and placed. In the fall, there will be more deals.9 b2 q# Q1 }# X* g& P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 M1 L+ F- _/ g }, K; S; |9 Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ @+ _/ l1 b0 F+ Y+ c# k* y/ q5 |: zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 v. N; J. Q4 l6 w8 _; f0 R
bankruptcy, they already have debt financing in place.
% s8 J( |4 d' a- D$ |0 p: u, G% ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) a0 ], V9 D; g2 [
today.
% h% ?, [1 g3 m- R; }. y) }& | Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 r3 V) N9 s6 w ^. p; W
emerging markets have no problem with funding. |
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