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发表于 2011-9-17 13:16
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Current situation: {9 u$ C: h6 P3 K8 m, a
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 I6 w' `) @3 D! U+ [
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 T4 H* C4 L/ y1 s Y& mimpose liquidation values.
Y# I U D; v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ T8 o E, K9 r, c& ?' Z' B: [7 u/ r
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ h) e* i. K+ A P4 L6 ~* Z5 T4 t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension j. j B6 F' |2 m1 f9 W" c: z, {. M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
4 F, n3 `4 F t x; U: [( `# _+ g8 ?0 s. a2 P5 \3 r. { U
A look at credit markets, }1 F' @: ?3 \& w0 ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 O3 q/ ^6 ^1 Z# f6 f
September. Non-financial investment grade is the new safe haven.; v f& Z# F$ [) J5 h8 l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
# a/ e" v5 u, S# d; h% C! bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% k2 g2 Y3 G& ?! s, L
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; L) O: T7 _1 |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, u$ Y" H7 p. l" F: G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ ^; r, L A, apositive for the year-do-date, including high yield.4 C4 t. [: Q. f8 R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( W- z# T: [3 c+ \+ _5 w/ Ufinding financing.% g5 O4 x7 J7 a7 E8 l! }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 F4 a* R! T# C9 e3 T5 V
were subsequently repriced and placed. In the fall, there will be more deals.
, a8 T8 z A% w8 e$ a6 A Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 A. A! _0 N2 ~. E9 O* t( K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( e" ~( \3 _. d2 w0 L& S3 o' dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# ]9 H8 U# K& X! i) B; ibankruptcy, they already have debt financing in place.
7 o. [0 |2 V+ \; V1 l2 U" o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- I6 ^4 @3 A/ m4 Q4 B8 t' y0 F
today.
) K% |: P) F: _+ d( L9 i! i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& v! Z; C0 B+ c8 N: B) Qemerging markets have no problem with funding. |
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