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发表于 2011-9-17 13:16
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Current situation5 n8 X4 X6 q, Q" |% x
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* O D; _% V/ m a# v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may \3 ?5 {8 u, U
impose liquidation values.
! Z* |9 u' q3 Y1 `( m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* ^& S$ V1 \$ z% ?0 j, O, G
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 d) d1 [0 y& C: i- L! T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 L+ e! S( X% qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 Q) m; Y/ N3 o( f/ d
) z" b4 N2 `; |* h rA look at credit markets' t5 g4 l& {# L& }3 U0 o* B: \8 u$ h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- T0 v5 l, ]; S& ^% K! y
September. Non-financial investment grade is the new safe haven.
7 `& \2 X& ?% l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- r0 Y i. H7 j& p5 e: ]
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& {; U9 ?4 J2 Q) ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 ~! d) v. K4 u2 J3 e+ uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, u+ I$ ~3 H4 ] r HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ u" P; H3 W n2 H
positive for the year-do-date, including high yield.
4 I D" e& z' Y1 y" O% ]: ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" V/ w& ^/ l* D# ^
finding financing.
{9 n! j/ q% R+ t2 X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) {( j2 v0 Z" D% s& Ewere subsequently repriced and placed. In the fall, there will be more deals.
0 |: q4 }6 y: Z* ~" O5 ^0 e; L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! h: x% E. f% G8 {7 v' Dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! [2 d% E6 D& X- v Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" X5 h" O r0 q2 }' K$ Kbankruptcy, they already have debt financing in place.
* E h4 U8 Z4 T5 }* C European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 p4 H, P: x4 M) |today.- L( ? E+ [$ V5 N8 Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 z4 Y$ l; [. g) r$ d vemerging markets have no problem with funding. |
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