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发表于 2011-9-17 13:16
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Current situation5 O9 b7 x5 \: ^4 R6 w. u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 i: Z. l3 E7 C. l1 ` G
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 B, t( [: i1 p1 z0 d
impose liquidation values.
* k6 G0 g' p" u. D In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: J+ G4 h- A: F; U) QAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 q+ y: S/ F8 @8 T# i2 f The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! Q" i7 S/ \" L' A( b
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets% V3 m( I' X& u0 g$ R+ a1 C6 p# A2 r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: @( K7 |' d) hSeptember. Non-financial investment grade is the new safe haven." E/ N) y& s0 F8 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 h b0 ^5 f5 a% k( r2 H
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 J$ E2 L1 |5 G7 _billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ C& n8 v4 H5 P( p0 f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: i+ O+ ]. L/ W3 bCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) C% d8 K% T( d3 K/ h
positive for the year-do-date, including high yield.7 Q7 I. Q5 T3 S% H
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! w1 I* U( j6 N: C9 [& r1 K( Pfinding financing.
5 P' U0 X5 D, M# ^9 g Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 C, a: ^$ Q5 l3 s' J- O" H: pwere subsequently repriced and placed. In the fall, there will be more deals.# o1 {$ ]) I" B) |$ m0 n+ T
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 `4 z2 |0 H0 e5 _$ n
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, T# q" W& n+ b1 q( t) Ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. S7 |. D+ d! Tbankruptcy, they already have debt financing in place.- |, D: _" K( R. _; M
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" z) ^- r4 \ ^6 ` l: `/ ptoday.
) Z5 f8 J2 x) ^! j1 ]; }$ e Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ X$ t- A: _( Aemerging markets have no problem with funding. |
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