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发表于 2011-9-17 13:16
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Current situation, `. _. ]4 t+ v5 z& U1 T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 L. b: t" F" W: Was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) m) W9 C8 t9 |9 Yimpose liquidation values.* W4 K) U6 m; k* x$ s& C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" k( k3 C/ o3 f7 s" D6 MAugust, we said a credit shutdown was unlikely – we continue to hold that view./ O/ {+ z! j/ e0 i! D( h8 W. G
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. A3 M. O/ {8 s U5 Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! v/ C! h( p; P, E' V. h8 q- R
7 C4 p+ [2 k& @: X/ C0 D$ ^8 IA look at credit markets
. _1 t8 h+ U( s" C4 C Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 ^, x9 B! b$ f$ c( ?% ]7 S
September. Non-financial investment grade is the new safe haven.% v4 l$ ? i0 ^% E# {1 j
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 N0 j; x Z/ [ n& b" _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) {: x J A& gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 A* m. W; R4 W2 \3 Q* H7 a1 ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. u. o, @& p7 y) `/ z1 Q D7 H8 [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- _( F+ h4 c( q! z0 wpositive for the year-do-date, including high yield. _. H/ \( H2 w9 O3 ^; q: r
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ z5 ~( a4 k3 e5 S$ ~, }9 |) Pfinding financing.
* b. ~# M+ u1 [4 Q2 M+ q3 v+ M Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 t0 y7 {. `% i: B
were subsequently repriced and placed. In the fall, there will be more deals.
1 y6 S1 x) a4 D, z3 k1 D! w Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; q% J+ F6 f+ h3 K0 {; d! ?$ Bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were1 i1 F! k! s) ^9 _
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 g: h2 d. g. Q1 Gbankruptcy, they already have debt financing in place." P Y+ H0 I" b1 }+ S6 [& R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 O; `" O; `/ k$ X7 r& ~
today.4 R8 @' x$ K* u$ k$ t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# G9 l9 Y) e( y& P! F6 memerging markets have no problem with funding. |
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