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发表于 2011-9-17 13:16
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Current situation5 j9 J( x7 |% y* i# x) O+ z* d1 z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
, U. ^# T p. j. Z0 Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 V7 ?2 Q& q: `3 Zimpose liquidation values.; y: v3 {; { j9 j6 E9 d- ]
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 ?0 ^9 r8 Q& bAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 H/ a# t+ K3 C; W4 z0 A
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ y7 ]) Z9 t9 s, w {7 z# w. A7 L- ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% y- R. b* I6 R8 ?# ?; j/ G
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A look at credit markets9 ?1 W: y! Y/ Q, n! G" N; A
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ Y T' @1 [$ {3 D3 n1 g5 ]9 S% }7 N
September. Non-financial investment grade is the new safe haven.* ?' r( b( {4 [' i9 }1 m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 e! x' }5 b) j# x6 g+ sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% e' q. V: h4 N3 m/ s) p+ q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' u) K6 T, d( K9 ]3 g$ xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; @5 n1 {$ {: H& I; A# }8 B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& m9 y! d+ ^! c( d7 r! Z+ L) qpositive for the year-do-date, including high yield.5 r) s4 n, p8 z# f- U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
8 w2 ^5 f/ |- Sfinding financing.
, G8 g+ b: `* t) [. K K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they t, O% s' y9 @
were subsequently repriced and placed. In the fall, there will be more deals.
" r, @$ t$ [1 { Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 I8 V8 o% ?6 P' j) `- H' h6 c6 E) k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# q3 O7 w/ L/ ^6 n z# q. Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 N3 n J; u6 ^. K' ?3 Q2 C9 {bankruptcy, they already have debt financing in place.: z/ z& I- q$ q- P
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ _: w0 |8 Q1 a
today.
5 |) `3 b5 d5 {) m3 f* @1 P Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: T" H, {' H) g; ~8 M! k3 Semerging markets have no problem with funding. |
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