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发表于 2011-9-17 13:16
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Current situation2 h4 V' o" r; W- G, v
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" q+ |: z3 t) t& y$ Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 T5 x& F. H6 m% v, D8 l$ Fimpose liquidation values.* J' q$ y3 j, H' ]% {7 V
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' ]8 k4 B* ^3 y! p- n; R4 }7 N- y3 U/ l
August, we said a credit shutdown was unlikely – we continue to hold that view.
3 T2 D, o' A0 T ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 G' l+ M0 L$ L1 Y$ ^scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
3 G. j) z4 |6 ^: r/ U3 j* P
+ a; T% r5 ~* AA look at credit markets
2 }, y# d6 \* j" A Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% t2 G1 k7 O+ c8 }' T& TSeptember. Non-financial investment grade is the new safe haven.
. ]$ {2 K a/ s/ l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 {1 U& X3 r4 ?9 a6 B) B
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" v; Q8 R$ \0 N' u. y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( a& J2 U! }' d% r- Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 J1 t4 Z1 D- q5 X6 F' KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( j" x% R9 S# [2 W. r6 cpositive for the year-do-date, including high yield.
+ K! j; j" H) {# K, ?7 g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* d' A. o Z6 p# O
finding financing.
: _" c9 [) [% }3 W Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' W6 Q+ @7 y* C7 X2 \' vwere subsequently repriced and placed. In the fall, there will be more deals.4 E& @: H* X) {- h+ \: ? u
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ H) R, A- h+ U1 L9 m* o9 |1 S$ Eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* N2 `* F$ F- L. }* ^$ E8 D3 D* ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 ^# r$ e+ ]* H pbankruptcy, they already have debt financing in place.0 l6 a1 V! [( Q7 ?% E
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# z+ T0 W/ y7 ctoday.
! }6 [$ K5 k: v# `; P Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
d& Z+ T# m( \* \emerging markets have no problem with funding. |
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