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发表于 2011-9-17 13:16
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Current situation+ b: P1 q$ V" l7 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ P2 }, Y% r m1 ~( `% q% [as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 k# ^6 b1 b9 y! g/ m$ W% rimpose liquidation values.
$ J% R. H! ?! N1 L$ ?( z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! `* z: y/ i2 M; a
August, we said a credit shutdown was unlikely – we continue to hold that view.
) W+ w$ r5 ?# }1 v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension L, x3 C# W* C, k" U! v
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) A& o! f' X4 D$ ^A look at credit markets' R' r, v4 i+ B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 v0 C$ ^2 h2 Z7 d# ~2 @9 ~September. Non-financial investment grade is the new safe haven.
! S4 P$ Q; ?' E- a: D7 K" w5 R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 C" M2 F3 K6 jthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 l% i0 `* j; h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- v& D$ _; Z/ ]1 ^9 ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, q' W" o8 w. a, J. d; lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 @5 R- W8 R" p9 w* h9 ipositive for the year-do-date, including high yield. Z1 c; T+ l4 y W7 a4 |. p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 N8 v3 l1 G+ k8 ?) W9 Xfinding financing.
0 y3 G: s$ |' o4 ^( d8 E. W8 v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 B3 K( k5 t9 ?! P1 ~$ |+ M4 [
were subsequently repriced and placed. In the fall, there will be more deals." R9 {; ^* i0 ~; v
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; j8 J- r& Z: Y+ his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& v! \3 C: @; ?1 `% ]
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ j- _, q6 ]! _8 A! ^' B
bankruptcy, they already have debt financing in place.9 h& P. S+ r' B( @9 w
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# I& E# z0 E) \1 j, k
today.& b$ ]& q* ?" d- G3 L( |
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ f1 e( _7 D0 s) V, A b* aemerging markets have no problem with funding. |
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