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发表于 2011-9-17 13:16
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Current situation& Q& ]0 M7 W, M1 i( k
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' m0 s8 ^3 W" f& `1 ?& J! Nas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 X( j* i2 b: ^. q2 x" O {7 e
impose liquidation values.6 b5 C! X% M5 h9 u/ @+ J' x8 b2 ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% f# ^8 N9 I6 u$ _( r6 e
August, we said a credit shutdown was unlikely – we continue to hold that view.5 z. _: j( a! d+ f7 x& K; L
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 G5 @1 H6 {6 h6 _9 @2 bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; l, i | e% E( BA look at credit markets
$ d6 G2 f8 b5 e Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
^, Y; X- j" Y9 e4 ?September. Non-financial investment grade is the new safe haven.
, `1 c" ?4 i2 z/ U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- r3 y+ j) o% e& I I; t& dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 n# `/ D: {4 H9 I( b
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 N. L0 ?0 {* t8 L/ q) j! R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. G. t! u/ i5 P0 Q* M7 o
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 P( d- R1 b* t7 bpositive for the year-do-date, including high yield.5 x- l1 F' F' N0 Q( F# o7 [- L
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# h* A( J% N# O2 s* Z4 p4 K |
finding financing.
$ U0 |% o* r1 d, I4 e- m# k( O Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, l6 l, j0 J( I: f. I- swere subsequently repriced and placed. In the fall, there will be more deals.
7 ^9 D# T4 p) Z! M! i Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- D& w e7 u2 A, Z" b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 Z+ j i0 `5 q/ }3 \& [going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, a' j/ [$ h" Y' ?5 R
bankruptcy, they already have debt financing in place.1 H' r, L# i% B4 H8 O, Q* f ?, R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# k8 Q# B; {+ t: z- dtoday.# B0 B1 E# D+ k2 t& p: G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ X4 L8 G7 `3 B# U w
emerging markets have no problem with funding. |
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