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发表于 2011-9-17 13:16
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Current situation# h6 S# n% I6 l* U) p2 z+ l( r2 j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. X( W( b2 H% y* J4 h1 \* Y' p/ b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
z& A' C% b3 simpose liquidation values.# B u- M4 H2 Z+ P- j
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( y6 A; M, u6 g. cAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 t0 `% Y- ?' D* Y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ L: a, L! ]0 f8 Rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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' P. f6 D- l- h5 w# V9 qA look at credit markets
2 F1 u/ ]8 W; Q! N9 m& v. `( h2 C, F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' G/ q/ ]6 i6 KSeptember. Non-financial investment grade is the new safe haven.
. r' ~& p; `3 G8 o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- N/ i1 ?, @" h) |9 e3 f
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! U2 k: i, i; J7 l+ c. H2 Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# Q" Z. Y5 G- T6 k" Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% v; s2 [5 C6 b; R) F' d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" _$ M E: B! R* @: D0 W
positive for the year-do-date, including high yield.
- C5 I' x7 N( c. E+ d: u; F Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
8 ~. g" Q9 P( U8 h; \0 gfinding financing.# `: `7 ?, y& r% t4 K5 e: P. m
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. B: n9 i6 }, D% \7 a, J+ N3 Qwere subsequently repriced and placed. In the fall, there will be more deals.# W. S6 j9 F+ z" H) @1 \% N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, R' c& I" W; A. J; K5 Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; ~; P8 u5 u! s& j2 @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" @, g- I+ ~6 |" u& l, bbankruptcy, they already have debt financing in place.
3 [1 M3 L- t' b$ @. n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ M1 _& n4 l+ v, _( S: t, g# Xtoday.6 { E; q% g0 _: L
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- O) S0 W3 u% u7 y" B1 |! i
emerging markets have no problem with funding. |
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