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发表于 2011-9-17 13:16
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Current situation; t$ Z& ]$ D" T4 d6 G
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ j1 Q4 M+ H9 a, h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ J" x# j7 f3 ~; r. v$ p' `impose liquidation values.. @6 b" D/ I1 J1 O1 O( u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% |5 [4 Z. T' q
August, we said a credit shutdown was unlikely – we continue to hold that view.$ e$ l( l; }' `% f
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# }7 n1 M/ X! q9 a' ?: R0 ?scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 F4 S3 _: y/ Q, h
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A look at credit markets3 b6 S2 j/ Y5 h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 ^; Q. |0 N+ `0 |8 CSeptember. Non-financial investment grade is the new safe haven.1 T8 c3 f, Z1 s- @
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- _' M; u* P9 o d) wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# h, p$ L6 b7 j" O: r5 d, I7 Bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 }/ A' R. ?# ^" n- ]2 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 N5 S- h& B4 o: pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# J2 t) x7 W9 Bpositive for the year-do-date, including high yield.% t/ J9 T( y) x$ `4 j
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble) q2 y! v+ ]& j$ y4 G; i
finding financing.
) a( r4 T% e3 K7 c: K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! l! Q2 P4 p9 _were subsequently repriced and placed. In the fall, there will be more deals.9 Q& V9 C3 H9 f) u
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; y" W2 o2 z Z" i- pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 ]* M$ F- j# g4 Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ v& L7 R! E4 O {8 z4 c
bankruptcy, they already have debt financing in place.4 X0 s( U) d/ Y$ e) O3 G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; P' C( h# d1 y! }today.
& C- _3 s& ?7 b1 m! [. }& }8 i0 s Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 Q" D/ P8 }% |' K: t# H" remerging markets have no problem with funding. |
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