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发表于 2011-9-17 13:16
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Current situation3 X% R9 n8 \1 i( R3 L
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; M- W5 d+ ^5 p4 Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: b- @3 y! b, U6 L( T! c6 timpose liquidation values., y- i% @% r; r) ~/ ^7 d% q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ R: j' F V0 g( cAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 B/ A/ ^" K2 u
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ \+ w( j: r8 R$ W
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) S ?: ]. f( Z5 uA look at credit markets
% @2 H% \' _( \" q0 a: h- s1 b Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- Q7 Y( F1 D" U% Q" ^- q* I
September. Non-financial investment grade is the new safe haven.
% I8 e+ ?! @- n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: |0 y) Z2 J% {# U+ c5 B1 |) t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: a d; D+ F* R( g B9 O* ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 n+ Z* M1 N8 n( A' N* D' P
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. j1 \* e0 j4 K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. A! j' s3 @4 |$ c; v
positive for the year-do-date, including high yield.
- \ f* ~! _& _3 L, ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! j1 d$ |, |+ w/ _( E+ Ffinding financing.
' v- L9 r# P/ R( B8 e: H8 x; u, h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ b2 m" W% M; l8 E& n! V3 P3 W% B2 Hwere subsequently repriced and placed. In the fall, there will be more deals.- B7 A$ ?' E3 M" m; r' X4 p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' e& b4 n" E+ F o- o, a: H' c7 K7 N
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 a) M$ W! C [ n4 G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 S: H! C+ C( Z" y, p, @! ]5 k
bankruptcy, they already have debt financing in place.* d! A" k9 Y& y; b3 t! U$ G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: x2 m5 p9 E4 g, |
today.
. h$ R% R9 D7 Y+ y* H# ~" x( T- Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' {. H" ?5 J, T* P& Z/ F2 demerging markets have no problem with funding. |
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