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发表于 2011-9-17 13:16
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Current situation }' i% }4 M: @; q% {# ~
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 g/ [) _# o& oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 o( }- J3 r% _; W) k, j, |$ P- Vimpose liquidation values.
4 u' ~1 I/ {5 s* t+ H; | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, A0 T* K% v8 T1 {; J% j) ^( a! B
August, we said a credit shutdown was unlikely – we continue to hold that view.8 u6 x/ [$ Q6 R7 t% f) ^
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& a9 Q) q, ^7 z2 |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 Y. `( L, u+ W# z0 T
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A look at credit markets& |* y5 p! P" B3 t1 @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! }# b: C- f$ O# O8 i) w) s2 X) ESeptember. Non-financial investment grade is the new safe haven.
0 [; I$ m+ ?2 ^* R* p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; @* s% [, i. @& l6 mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. t9 J6 g V0 {! u# k- K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- K/ k1 d. m4 @& p
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 e: R8 p4 \* y1 PCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- b3 _6 K9 w/ r% o+ g, u: N H& s
positive for the year-do-date, including high yield.8 L1 _' W" {( F6 R6 r9 V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% k, Z u: W u3 w8 s" o0 i1 K
finding financing.* N0 h* |. `2 ]4 {' ^; ?
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 ~0 t4 T% M7 i$ o' n
were subsequently repriced and placed. In the fall, there will be more deals.
* q- s) A6 c; ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( _6 ]) @- \% Q ~. B' S: Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) V" q4 v, ]. a4 F0 B3 r {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 j M% F% Q* @' G4 G
bankruptcy, they already have debt financing in place.' ~6 ~: W6 `" \+ ^4 }. G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- s+ R% {/ n- j! w5 G+ u
today.
3 S/ w7 ?+ X ~, m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 a3 N9 E- y( _7 N$ Y
emerging markets have no problem with funding. |
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