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发表于 2011-9-17 13:16
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Current situation" I1 b* W3 T$ B* w2 N& W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" b- {) p9 h* M8 Z* H
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! H' C; F6 h, L+ A0 bimpose liquidation values.. O3 ~+ |. o: \( Y% Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 ~! F/ Y) `3 c/ E4 h0 ~5 d
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ _+ S: O4 S Q& d, } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension X9 d" w& x4 G- Z' M( S" E6 O
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 b) h% `3 v, T
* {: v) H8 ^$ G5 X7 C" ]" @! o+ a
A look at credit markets2 R% G: C9 [# f8 R) v- n& O ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) Y8 }# ~/ B% PSeptember. Non-financial investment grade is the new safe haven.2 \4 w. n/ w2 i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 h# I+ t0 j6 M5 R* O& D# N2 o
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 \- {. H7 b f( Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* s ]% _& H" J* Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; Z7 u4 ?) ~4 L* tCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 A1 u$ b6 b) R# q3 ^$ R2 K! T. V' Mpositive for the year-do-date, including high yield.5 X9 ~8 `( L$ q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ q/ b) b' J0 X8 O$ ` y) ]4 |" ^
finding financing.
7 M0 a9 \( V9 F6 ~# a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 Z1 T; j. i2 a$ X# H2 v0 R% z. rwere subsequently repriced and placed. In the fall, there will be more deals.- e- ~/ }8 I9 d' l' i2 L, ]6 s+ v; h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& K# N0 [' Z5 l1 f+ wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 \! T$ i# j& @% E5 N# q1 fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 y* [5 i! ~) B3 f: J. T) J1 N5 tbankruptcy, they already have debt financing in place.; ?9 L# M' S; g
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) Q+ k4 O$ d6 @& x4 n, c$ C
today.8 Z1 x0 e# z7 U. l4 M8 ? s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' ?( \, d8 I& X r: [" O# Q/ E. Hemerging markets have no problem with funding. |
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