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发表于 2011-9-17 13:16
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Current situation& e8 L6 A6 D5 O; C- {' W2 }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
S. h2 i8 Y- C) |: g, Kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# y! O& n+ I9 q& u5 W
impose liquidation values.
+ p4 W* F. L6 ] O- }/ k+ T8 V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 e' D6 l0 F2 f
August, we said a credit shutdown was unlikely – we continue to hold that view./ [3 X+ H% u' t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 M0 i3 ~0 D1 N# Y- c1 F5 y' E7 \" escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* N% S5 L9 E9 o
7 z+ D/ D1 @' \6 L) ~9 {A look at credit markets% `" v+ L/ Z3 h2 y/ S* s: A/ s
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. u3 E3 u, I5 L% q
September. Non-financial investment grade is the new safe haven.
1 b9 c2 t4 u/ D3 U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& S! u1 C4 H$ X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. f% b4 ~+ p( R, {& ?! dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# I! y7 B+ V% R1 F) p# A3 O1 S' Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 n, @# E' T+ }/ ~+ T8 e: r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 o; X8 U* ^, O" S% tpositive for the year-do-date, including high yield.
J4 ?) v: p1 k+ B) N1 w& \ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) }# O' T7 a9 ?8 sfinding financing.; n. B) y3 L% ]/ n8 a0 [$ Y2 [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 @5 c3 n( n7 V @9 F1 Lwere subsequently repriced and placed. In the fall, there will be more deals." P" N# O8 `3 S0 a( m- w& e# t
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; s9 W' u" k, J) r0 Wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 K, n2 [. i W8 q: Z) c
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
X5 F6 P6 U' ]8 _bankruptcy, they already have debt financing in place.
6 q& ?# c& ^& K# i European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* w, a! x# ~' ? I: ~' Utoday.
6 T: s- N. O' Z: V1 m8 `3 R5 q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; N+ b3 V& b3 jemerging markets have no problem with funding. |
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