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发表于 2011-9-17 13:16
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Current situation/ l# S' L- y1 f) o
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: E# k& \2 E, L9 X
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 u& a( u3 D% t3 L$ Qimpose liquidation values.
) @& u' j( k6 G4 R In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 l# {% D! g8 o5 H7 v- G8 F9 w, wAugust, we said a credit shutdown was unlikely – we continue to hold that view.. m6 b6 @' `# D& p4 Z+ {4 i0 J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" s1 t" v( ^ K$ j% [+ lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 @8 _$ `3 \0 g3 z) p l
% W; f" c0 D( Q7 L+ _; n
A look at credit markets
9 Z4 M+ j( F$ l: q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- n- j# D1 f$ e0 i; D2 z
September. Non-financial investment grade is the new safe haven.
$ S+ s* _. X- x- c/ W- ? _5 _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ r$ q) L4 q: Q9 Y0 y4 K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, m' B9 y/ f4 D' v+ F$ v" H) Qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. }, { r5 Y1 d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ f8 ]. l$ ]' p( a+ f! P! a
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) t: Y% @& b$ U( A
positive for the year-do-date, including high yield.
. J; ?. y% f$ J# |: y, }% g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 p, C r$ @, K9 Q p, i% @% I
finding financing.
) Q, f$ g2 R- ?2 ?, q6 m( r Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 o, A5 k7 R/ c( W' {
were subsequently repriced and placed. In the fall, there will be more deals.( }" [5 h" l/ u# I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& m8 i0 L. ^ J! \/ f' Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ N$ A% J. z" s8 G3 o1 Jgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) t: n1 _5 x& E: p1 E4 |* t" j8 @bankruptcy, they already have debt financing in place.
* y% V# g; n- C9 ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 Q' z& \8 p) m" T# T1 E1 }
today.. ~- ?8 b- R c( i' D& i B
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 `6 A4 P$ }; |8 Bemerging markets have no problem with funding. |
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