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发表于 2011-9-17 13:16
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Current situation
0 x0 W+ t0 g) i- h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( t4 y8 X* f; @- O- p7 p, O+ A% e
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& {; D* Z, x. P8 _ x6 t
impose liquidation values.
5 v( v$ H2 U" C# k, q$ s/ M1 a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 E! u; J1 w: ~$ j# G- t
August, we said a credit shutdown was unlikely – we continue to hold that view.
# W. P9 V9 J2 m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 d6 X0 R% U, F+ @; p# Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ a) b9 @; W- U' b; ]: W
! k! M0 |4 E# a9 C$ ~! I. r- dA look at credit markets2 e) o) F$ `8 [' ~7 W$ ~) }; j8 O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 J* O* t. X' MSeptember. Non-financial investment grade is the new safe haven.
n& @5 C+ W' A8 {8 D2 y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 n6 q5 |2 V8 F/ g
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ [* W: v$ V+ I* U3 g& ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 V, R3 }5 n+ Y' I9 gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: J; a, u+ S! x6 T. }
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' Y% `4 j! i/ I* m1 m
positive for the year-do-date, including high yield.
l T) v7 R+ p3 V- c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 J; Z3 Z! v/ I5 w% wfinding financing.8 T) I/ n# u+ {& V9 X5 A
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* {3 g0 ?6 _* K# p
were subsequently repriced and placed. In the fall, there will be more deals.
T% p% L' g/ ~, W' m+ k6 _ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: f- u" C F1 f- M ]. S
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 o. X( _2 N: _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* M) i z* B! [3 i$ x4 X
bankruptcy, they already have debt financing in place.
{3 R- m; @4 j% y6 B5 v+ D/ V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ u+ {! o1 |2 c, {$ m9 O6 Btoday.
. z6 W5 e% C& x2 z6 X& M Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 |$ v* y* h% w. [emerging markets have no problem with funding. |
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