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发表于 2011-9-17 13:16
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Current situation
6 j8 E9 I% T- O& G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' T) ~+ x' f0 e5 ]& K# N h5 R
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& y6 x+ J% h8 }$ r: K0 qimpose liquidation values.% ]6 B5 f; H9 B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) c: g+ G. G" }* k; m5 g* SAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( j/ K% v, J; m/ f# Y, g: g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( `6 N. F# D u, \* V6 {" O& N6 `3 Lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets9 p: s* G4 ^) ]; L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 {% o2 p5 L+ i8 w$ wSeptember. Non-financial investment grade is the new safe haven. Q, s" B q, B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
K1 u- f7 o e4 @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# x; [% C7 j& rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 q" W: ?$ ]9 Yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, n j# U5 g! L6 Y6 rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 F; d6 w0 Z& g1 Z
positive for the year-do-date, including high yield.2 b$ @3 x7 A2 p: ]+ [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: u+ d) ]$ s& |" ^
finding financing.2 U! E7 w1 H& j/ n2 V4 A* r) n8 Z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# ~- z& A) X1 n$ Jwere subsequently repriced and placed. In the fall, there will be more deals. Y7 ~: y$ Q# W3 ] X2 K2 v
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 z" K2 ?1 I2 h
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! C5 B4 l6 }4 f3 A& x: xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' [. G3 W0 ?9 I( s g) W3 {. \bankruptcy, they already have debt financing in place.; Y1 \4 T' w. L s+ ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' O( N0 Z) ]& D6 _today.
2 |' ^6 H: \, O3 i& ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" e2 E4 ]9 h t! y) o% o
emerging markets have no problem with funding. |
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