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发表于 2011-9-17 13:16
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Current situation4 Z+ K' L( t0 `6 N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long N1 |% b% a/ L- ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) v+ i! i9 A% L( Rimpose liquidation values.
5 H8 I; O) G) w+ g/ m: S7 b0 J( y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 x! A1 J9 p# \& Q
August, we said a credit shutdown was unlikely – we continue to hold that view.0 A5 e6 t/ N. k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension7 H* f- }. s; w. i7 K0 r9 z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets" D {3 a4 K1 H/ u, |
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 b8 `% \; y `, h. o( USeptember. Non-financial investment grade is the new safe haven.
- V7 O) u. G$ Q& d L4 o" G High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! p7 q- s/ [" q% R/ sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& L4 c ?0 r- @; k4 g r
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* b! l3 H. M4 C1 G' r4 w% Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) B$ n4 J Y$ I( n- _+ h- ]1 fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 t; @: P" j/ u( r: _! Q( @
positive for the year-do-date, including high yield.
# q1 R* V/ O( q. Y! t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 v" B: a c6 Q) j/ [6 l* Y) d
finding financing.& {# f. S0 p4 H' n3 v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. J# C3 Z0 m: R2 B. r; o3 p
were subsequently repriced and placed. In the fall, there will be more deals.# |9 K5 ^. k* V) F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' U% W( N) a+ r. P) e% Iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 j$ X2 o1 W# g* r3 tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# e3 z6 u" @: E p
bankruptcy, they already have debt financing in place.
# Y. ~" ]: c# F: q% C+ [ H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 i9 u. {- B2 p0 e$ p2 m; U" n
today.
* X( ?6 p y3 T. ~7 g ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in Y& X5 d2 E! Q
emerging markets have no problem with funding. |
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