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发表于 2011-9-17 13:16
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Current situation
0 n! R: u; ^6 R; `. W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! p5 u+ b$ V3 d+ g6 F! Was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) F+ i4 f. R& b2 Z. R" v: A& Pimpose liquidation values.
- R/ j" y* M' T8 i& Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: n8 L5 B* |9 Y+ p2 b! o1 l' e
August, we said a credit shutdown was unlikely – we continue to hold that view.2 s3 r: V# _# m7 T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 P# E1 Z0 _. B: n1 Z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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/ E; p+ R) W. w! k/ h* W9 h$ vA look at credit markets; [* p' L) l& ~4 ^
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in D* }( K2 n" a* B
September. Non-financial investment grade is the new safe haven.
% o. }9 C& `. n" L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ k. B) p: A2 P& J3 v7 [then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 u4 v3 d# l, j; M! R5 ?& E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ [! U& H% c6 X$ Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 j6 A9 k1 g2 K9 k# u
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 F( H2 W8 p4 z; W, d4 tpositive for the year-do-date, including high yield.
/ W2 _; P6 C1 H; S! D5 _% r Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 B) j' x" o) B
finding financing.
\+ Z3 U8 c& }" g6 x; A( i/ n Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ u/ X8 m7 y T j+ v! j8 I& ~
were subsequently repriced and placed. In the fall, there will be more deals.. ~6 O* P0 |$ ~( Z5 ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 b7 q. B& q( y# ~+ Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ `& f, H+ l; A" J- Y- N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 f: o% j& ~6 w" Ybankruptcy, they already have debt financing in place.
: H0 _4 H2 @7 U8 v4 e3 _ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ h6 G. J1 H# y8 x6 t3 o
today.
9 }' ^5 R1 r: ?8 E Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& V3 f: y% T7 [ I! pemerging markets have no problem with funding. |
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