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发表于 2011-9-17 13:16
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Current situation- ^& D7 \9 j' a- a
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 g- j. N% G" M k$ S0 C9 Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: [! A7 ]$ {3 p' Q* s$ _, P- c3 x
impose liquidation values." b+ b3 J. U5 `, y/ H
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; |, {- F# l/ H ]
August, we said a credit shutdown was unlikely – we continue to hold that view.
) ?$ W6 ]4 Z3 a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- G+ [) c0 u/ {/ Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
5 e) n& B4 C) ]+ J0 `) I( y+ g2 N+ t1 k) _7 i
A look at credit markets, N: r: W' K' @" g" _* J3 L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: P% d5 t" ^0 X7 w& d1 f. i
September. Non-financial investment grade is the new safe haven.
8 x! |/ K5 S$ X) `7 K; k% p, g: a" m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 {3 F% d) }: T" _. o5 L/ _then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% o5 q3 R* i4 W6 C" n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 s* Y: o& w+ _- X7 [& raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 |. ~( w0 H( E, q0 j) u8 J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# n+ x3 r, C/ K- V
positive for the year-do-date, including high yield.
- z1 c% y2 k( i0 d Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# q7 `6 m) d8 M0 I8 Y8 Ffinding financing.+ E) ]% m5 i$ I+ K. {. I2 W' z! \6 i
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; s- H$ F' k* J
were subsequently repriced and placed. In the fall, there will be more deals.
1 Z7 X# Z1 b4 z4 n$ E9 [: p Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, H2 ~' O- ]- _6 Uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! z8 o& x" P9 M" b0 O3 m# V5 A0 Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( e- }+ {6 X2 ?! I8 C% W; m
bankruptcy, they already have debt financing in place.
; i( o4 J) m `" Q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ V, q4 B$ Q7 M5 L% l
today.9 |1 p. i0 [. @. Y6 f) g$ B& u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( g% V2 r4 Q6 temerging markets have no problem with funding. |
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