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发表于 2011-9-17 13:16
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Current situation0 q( w: P- k- }, O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 F! ?0 H) t6 j6 o9 y8 D
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
\+ {* A3 P, l( R2 A6 Iimpose liquidation values.) w$ Z; l* u X7 z5 q: T, T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; {0 ?! l4 g, O! H1 b& VAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ Q! E8 O. d4 I, i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( R; E2 C8 s/ _8 n5 h3 |7 Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 ^0 c8 E/ c+ f7 ^A look at credit markets
$ y, W" X$ \' N2 |$ M% Q! t Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% n0 S/ q$ ~. \6 G% D* b+ PSeptember. Non-financial investment grade is the new safe haven.
( t( ~9 P- w7 S! N: K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 \' g1 K% I h5 w# u( _then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 W$ \2 ~# D# v# a$ i# M; }1 U
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* o2 ]) `" O: e) Taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% G1 |4 `7 f" I; P9 E! CCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- f/ k( K9 Y0 b& z7 t+ a
positive for the year-do-date, including high yield.
$ T/ X! t1 e1 h r5 \- Y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 i$ Z4 n7 Z! ~. I/ l9 a' Ufinding financing.0 F; T7 l ^/ @+ P4 [' W9 N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ q+ T" j% J- W. W: E* d4 Q3 E' p( pwere subsequently repriced and placed. In the fall, there will be more deals.
0 l* X& A \+ k0 c1 p; `" ~# F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ [8 M. v' a+ r7 d. L3 [
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" ]+ U4 y- B7 `, d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# r6 N) V }$ p
bankruptcy, they already have debt financing in place.
6 a; u4 m k% l European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! W! g; _. p6 a5 J( Z, x: X
today.0 x% d8 I {" }5 ~: t7 X% f2 h
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 W+ w) S8 b$ v6 t+ L2 E* G
emerging markets have no problem with funding. |
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