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发表于 2011-9-17 13:16
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Current situation8 _. ?! ^- } R: p( ?
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% E: s7 D4 P) ]. k
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- R) C* p2 H7 F5 n- M1 o# |: Z' q
impose liquidation values.
; R+ x0 i5 i/ M! z4 u) L6 G/ A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 R7 X; A& \* J: CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
. y6 a0 L A) t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) H) w7 o2 d }
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets6 @. C! g, P. V+ ]/ v
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 P" @9 _' l H% L+ OSeptember. Non-financial investment grade is the new safe haven.& P* h9 b# A' F$ E* O& k2 r
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ S5 Q( ]: Z# h* Q* q3 f3 o0 t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: n/ _9 ?- Y2 g) n# L
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( o: c6 @3 P! `. v/ n& _4 t& R( d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 e2 f' @2 x+ O5 t8 Q$ ^ uCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are ]4 F2 E, q# k v# v- g" Y1 ?
positive for the year-do-date, including high yield.
u, ^$ L. [0 T2 D- X Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# Z) g4 {- X& ]; ]. ?finding financing.
7 k; ]& \# z$ h' k- C Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* t; Q% H9 ]2 } y
were subsequently repriced and placed. In the fall, there will be more deals.) B( v) I# p* o- `
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% N# h; H6 W: F+ y& \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
Z" k0 S" o# A4 Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, r( S- A8 Q1 d/ \2 vbankruptcy, they already have debt financing in place.
7 f3 X4 O; A- k, v7 m, `/ \, A European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, S7 r/ [. n; w8 \
today.+ q* A. n9 W! U% G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
^- C& @# z% T( Vemerging markets have no problem with funding. |
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