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发表于 2011-9-17 13:16
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Current situation6 _1 B) N/ Y9 X$ M4 w' ~" o2 y
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% b3 j3 n: \. Z9 A( m5 Y4 f" fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' w1 T$ ~1 ~% qimpose liquidation values.
' c3 Q+ Y/ y7 } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In b! P0 w5 c( S& |! X
August, we said a credit shutdown was unlikely – we continue to hold that view.& @( P) @$ n, A: U" O- }( E3 Z: u/ Z, x, P5 }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 t3 J h! u- \# _/ q5 D& E- o* y, Y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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* y/ m; [3 U8 y9 ~# y2 a2 X5 WA look at credit markets
$ g/ R, ]* N" ?% | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 d, J. @! B. l8 _& J6 ]3 LSeptember. Non-financial investment grade is the new safe haven.' R; {0 \7 K: L9 m3 ^" r3 V
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ E D0 ?5 Q/ T$ e
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 [/ l2 Y5 g) l9 Q {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' F' `% \ c. A- Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- n' d- P+ @$ C3 c5 ?- \2 dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) j- Q2 d/ \+ e: v! x6 {. Y
positive for the year-do-date, including high yield.7 |; G% L. o- t' K ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 T% C9 u }, t1 i" N) t7 _
finding financing." G1 e! a5 I2 v' j
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" ]3 W) C& d. P$ F, {+ f2 ]/ o4 a3 X
were subsequently repriced and placed. In the fall, there will be more deals.4 B% ]) L" i! ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ t; g5 S1 R& j& `6 V
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 y# q! W; E/ b2 c; i+ sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 Q: @! ^& a! A; W. ]bankruptcy, they already have debt financing in place.
& }' X' X! G* ~; B( p European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& s/ a4 ~' C) a: z
today.
5 @) W% M/ L# O+ ^. @ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' z; T' R, u7 Z: zemerging markets have no problem with funding. |
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