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发表于 2011-9-17 13:16
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Current situation% [; n; h# W2 G, v( J% g- D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* O7 x5 K& {% S* aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 c0 f" [( ?1 a. a( S) t; S- Nimpose liquidation values.
& C% I+ Q; i2 W& e In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, P* E" [' X8 J+ H1 [August, we said a credit shutdown was unlikely – we continue to hold that view.3 f! w" G3 b4 w7 \' @
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 F F6 c% E' z! ]3 s; O7 Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) G- X0 ^0 o: `8 t, V
4 Y8 J& G: M" X' R# `A look at credit markets7 r- P7 d+ M1 }5 \' m7 }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- z& B9 `4 M: m/ z* KSeptember. Non-financial investment grade is the new safe haven.. N" i3 j# ]0 Z9 O- f- ^$ M* r5 v" Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ s5 b# y: l! G4 G" m2 v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# x1 N4 b2 y5 i& V) G3 A0 |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 t5 u( W6 U- y4 _& R/ u( a
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# r5 I5 j" v8 Q6 d j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 D/ ^# L5 Z9 g9 e) v
positive for the year-do-date, including high yield.
$ `" E8 P# a6 w' R& y' k: r4 t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- [) a* ]0 P: t
finding financing.% ]* a' s8 f6 p; i1 J _$ u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. n& Y# W$ K1 h4 fwere subsequently repriced and placed. In the fall, there will be more deals.& C; N8 ]! \/ A7 }! C
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 f$ L& v* U2 K5 J. _: x
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& n; ?: S' x0 `- e0 O5 B D
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% [ q. C$ R8 d, ]* a! {bankruptcy, they already have debt financing in place." z. L s: i- \1 F8 E$ r
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* `1 B, T# \) { y% C
today.1 ]1 e0 w5 a; ^3 k1 f$ B4 o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* t) g% U: y+ J }& gemerging markets have no problem with funding. |
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