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发表于 2011-9-17 13:16
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Current situation) \+ y [! x, d8 ^& J! @8 D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& ~* p5 Q* b6 L7 was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' j; k& a$ h+ o- |6 H- t
impose liquidation values.- v5 [/ F$ f! ?. |% t [
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- z" x1 {! S( ^4 yAugust, we said a credit shutdown was unlikely – we continue to hold that view.; l5 |# c f' K7 n5 b( e i
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& u! ^3 o/ m: }, w
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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* f: e% }4 F Z% e4 M9 eA look at credit markets
. T4 `1 d2 e2 W n6 i# r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ l% {/ A' I$ `, I8 r! q% NSeptember. Non-financial investment grade is the new safe haven.
- k8 t, U# c# U/ @2 O4 c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. x: S$ x* ]2 H2 g' e. Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* J* R8 j8 l' b# j$ |# S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have T% \8 I8 m$ d1 h+ ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% s9 v; w. k0 H$ u/ F% a# FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ N i6 s! D3 s4 B" opositive for the year-do-date, including high yield.
# o$ K" A) f O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. {+ N$ [) q) hfinding financing.
3 x4 m( }1 { L* j' G- M# I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 q* H) x5 e/ n$ } ?5 \1 F. kwere subsequently repriced and placed. In the fall, there will be more deals.9 X7 J- ~1 x3 {& i
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* e. x8 U- V( k8 w( C, b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% r+ \* _8 @% m" f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# V& n0 b* ?! W3 _1 @2 m. Rbankruptcy, they already have debt financing in place.' ~$ [% D) z1 \& L
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, U/ u& D1 q C
today.
3 i) x! `7 T" m: [; C& ~) p; T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 e0 {1 u9 e) s) _emerging markets have no problem with funding. |
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