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发表于 2011-9-17 13:16
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Current situation
# C1 q( w X! s+ u0 o The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' U6 |2 F, Y# C9 N) f
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
0 h! U5 X" U5 _5 f# `% h; rimpose liquidation values.
( N: x; a, O8 N! ` In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 R! m0 d, P# K
August, we said a credit shutdown was unlikely – we continue to hold that view.% F; g( y7 T; [% }5 Q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% W& b5 X5 c* ^3 o' G6 o0 x) Iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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2 _- Y* h% P+ |' _+ LA look at credit markets
) C8 _; V( M# y# j0 q3 g2 x* Z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 j6 G$ }7 G0 Z' l! ]: b
September. Non-financial investment grade is the new safe haven.
2 T& F5 t4 ?; R/ { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 u+ F% w Z% [2 q( ~7 S6 e, qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 t% N. N+ g- k7 R6 Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& V9 e' ]) A- l6 ^1 Qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- Y4 ^5 a( k2 O# W& i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
Y2 k# d8 w( T9 d4 p9 q8 |positive for the year-do-date, including high yield.
: ]# }! W) ` V% o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. ^& t0 v+ m7 M* i; { {! G2 h
finding financing.: S& J7 J) n; h, Z$ L
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 Y% s- i/ V3 r) _were subsequently repriced and placed. In the fall, there will be more deals.# B0 i. }. ~" b0 M( h, U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ L, D! T2 D" ]1 e1 b( jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) d2 |! z5 G7 ]# U5 W" J7 F, A1 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" C9 [1 W' T/ P7 C X! h( E0 k/ Z" ^bankruptcy, they already have debt financing in place.
8 r6 v' U( ^8 r0 H* b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! p8 ^! \9 {# X" Itoday.: x7 g: P6 u8 R a# Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ e. |7 u+ E' _; Jemerging markets have no problem with funding. |
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