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发表于 2011-9-17 13:16
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Current situation. D1 o! o6 J+ n/ X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ K1 \6 F) |5 W& N7 \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may m/ R" A& [& E. P9 P3 C
impose liquidation values.
3 X& q0 Y* j- _ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% E5 L5 T4 y0 a$ s
August, we said a credit shutdown was unlikely – we continue to hold that view." O7 r, M5 v! N+ p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 R$ k. v4 B M- @: A5 }# o( `* L1 q; T+ bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., M% U5 t' P8 s1 _8 w) ]- j
+ Y) l. c; c& { P
A look at credit markets
/ `' j. o% v$ V( W" E5 X. O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 {6 e. m7 Y$ m! OSeptember. Non-financial investment grade is the new safe haven.! |1 X! f9 T8 P1 B, c
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 d# B0 N. n) `) X% C( N
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ [. D- I! Q5 D4 {8 P- o2 l4 y" K/ ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* k$ m$ R% {7 N( o+ Daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 W" x, M3 ?3 F: P1 p2 LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 w: h2 s' s7 r! q1 U: x" tpositive for the year-do-date, including high yield.+ {, p7 E( t: e. p" O+ `+ V8 S
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 l* C8 ^+ e$ F+ g& u( R, n
finding financing.7 ~5 M0 t4 H1 p. \, s
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- J6 i. u3 Z5 I
were subsequently repriced and placed. In the fall, there will be more deals.
4 h! C; }7 [9 A8 U# H4 ^ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% z6 y; Y6 b) Z; p9 y7 v8 ^9 y5 K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. q" B; u* \+ I$ O ugoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 y+ p3 {1 {# q! z" W% @6 j g/ E1 d
bankruptcy, they already have debt financing in place.* D, y) T; E1 K: k k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, O* c J) r' f8 B @
today." t: y" R' d2 F- `$ l1 y6 E
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
8 M& i2 h7 _! l6 x' m' [ k' pemerging markets have no problem with funding. |
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