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发表于 2011-9-17 13:16
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Current situation+ t% i5 y( Y+ I4 \) G
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
|4 H$ |" h9 z9 g- n* l( A$ D* Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) H) W3 l, ~1 Simpose liquidation values.
. S! u+ [9 U$ ]/ k" b$ } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; ~" ^' O" Y. k# L5 B. w& C3 i
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 F( C$ ]- h/ D8 b- Y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 h" ]2 G7 p8 j9 f, Tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets2 `6 ~0 S' {0 F: C( a. E
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) R" S4 t9 E2 b$ \) N6 i; X! ZSeptember. Non-financial investment grade is the new safe haven.7 c# s) f4 A8 u0 m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' Z4 m) @8 s# B. p K/ m- n! O1 p. h3 g
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 Q! s1 G2 k7 S9 T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! a) x2 _7 i' T. g4 ~7 N4 {. ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 j" _2 q. G+ H/ Y* lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 D+ R( G; n1 k* H
positive for the year-do-date, including high yield.
6 L2 @6 G# w- b& F {# z& f) J: @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 A: ?" v7 d* ]: H$ R4 o2 v! Q/ K
finding financing.
1 c: l9 s6 D! l6 N Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) l. M: a2 p* D; J. ]
were subsequently repriced and placed. In the fall, there will be more deals.4 [' y6 L H- g* }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 g6 Z y! k( S1 i% ]& cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; R! N# j0 Y1 c) s1 r9 Z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! w1 z" }! n {; |
bankruptcy, they already have debt financing in place.# d' ]. j- t" h* K: o
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ B# I! _) @5 H' stoday.
2 [0 I- H6 a9 u9 T( G Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 W2 q4 s% [7 U' H% y7 Q+ `2 G- bemerging markets have no problem with funding. |
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