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发表于 2011-9-17 13:16
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Current situation" h+ Z1 F& |: H" c2 ~7 R, a) B4 o) [8 I( f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( \! S! E! I% M# y; {4 P! U
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 r% [- }1 x7 kimpose liquidation values.- Y8 w, i( Z4 u( @, i, o! [ @
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 F6 A1 [- S- X" @9 A$ H
August, we said a credit shutdown was unlikely – we continue to hold that view.
) f1 A" [3 Z$ B7 Q6 Y! L The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 O0 u: s3 K2 r) t0 ~2 n- [; T( G
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* l" N& z& J& |( A% z
0 L3 @; g( ]: \2 R- B+ P, SA look at credit markets
- C$ `8 Q+ O+ b( Y. N- s" Y+ T& N Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' _6 x# o* @. L7 M9 W- A
September. Non-financial investment grade is the new safe haven.
: j! G+ [) M6 ]* `* i7 J1 ? High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 C7 h$ Y) R8 ?! {* O9 M9 B
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
T* e; q: X* s3 G8 C7 H7 qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" `3 K1 X9 [& r! b/ s9 e
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 K6 d0 C- z; F' s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: Z3 m5 u: l. }2 v. |positive for the year-do-date, including high yield.; J$ _. H) m/ _/ ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
L( n) d$ n. i7 U( m4 v! Zfinding financing.
X: L) t' z; t/ n: j8 @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 C& G7 w( j5 a Iwere subsequently repriced and placed. In the fall, there will be more deals.
' d2 |7 k8 ~) L& h. F0 m Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 m5 u' V# n$ i) }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. @9 g5 Q' q. [$ ^going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 G, q) H6 v5 ^
bankruptcy, they already have debt financing in place.
W4 R/ [ k& X5 N3 t {1 r6 H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% P& C' \6 j4 J+ E3 Gtoday.
( l+ p+ L/ v# W) I2 }& @* y2 r Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 T. K# ~2 O6 r' F0 Uemerging markets have no problem with funding. |
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