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发表于 2011-9-17 13:16
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Current situation
! B) o& ?8 y3 G' j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ i" T3 C3 B! i. }' }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: L1 u1 ?* j' cimpose liquidation values. X3 G- N& |$ \
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 W. n5 Q% y$ _5 a& m+ r4 FAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" q- r6 r0 i" x9 R, I9 P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 ?- B: w4 Z9 x" Y0 r. |4 p6 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ A; y3 u8 Q" B/ t% k8 \% L$ w, `$ \1 h c
A look at credit markets3 Q% W) Z l0 y# n% c0 O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 F$ O# K c7 U U1 ~
September. Non-financial investment grade is the new safe haven.
Z% v. O; L' y8 W5 u2 Z( {/ B* O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" ] X% V; X7 }8 }9 A: A* N: ?) f' K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 T( P& Z9 q8 E/ Q0 N! G' [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- ~7 l' A; t. l1 D, J- i6 Q1 B4 maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; |, Y$ q! g5 L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 H# P2 k4 H0 z: ` Vpositive for the year-do-date, including high yield.
0 k! `5 [& [# G# ]" _: J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( x5 R$ }9 s9 q7 W# a1 Yfinding financing.% Z$ @) y$ \; v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: I6 ]$ s6 }) twere subsequently repriced and placed. In the fall, there will be more deals.: u( d" m- i1 O; {8 y% Q3 u
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 ?5 n; _. W% U- e1 k3 nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& \+ u7 ?7 A4 A$ F7 x. Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 L, N$ E8 E, Ebankruptcy, they already have debt financing in place.
- x! x* G# n, A& c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 M) b `# T- L7 a4 mtoday.
: N% {# C; q8 l9 W5 k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ t* R) U5 a) s- L' M, H5 v; W) b. jemerging markets have no problem with funding. |
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