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发表于 2011-9-17 13:16
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Current situation9 |! E9 m, Z6 j6 W& h+ W1 C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 n4 _! C0 _5 g$ a/ U% fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may d5 \2 E3 b$ v8 ~+ Q
impose liquidation values.
9 ]7 e3 ]) A! i+ V* E( t/ p* X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 H2 l+ d y9 D3 k ?/ \; _9 rAugust, we said a credit shutdown was unlikely – we continue to hold that view.
7 V8 j& m% q% c) {$ D# T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& H* z: n/ a$ A' oscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 Q* T' D% y# ]/ Q
. h" C4 ~" B; B) jA look at credit markets5 u; E Y5 A# r2 l
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 N! M: s O2 ]: L! ^/ _September. Non-financial investment grade is the new safe haven.: _! Z6 w! x% U/ I0 F. K, \: `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 ?7 k+ E( `! _- |9 t! g! I/ r
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) K1 ]/ n8 ]# j6 K; D# z. [! w6 h. X7 D
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 p' r$ K1 a& naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ w6 `$ c' X; V6 X; S6 G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 c& Z7 ] V* N7 x
positive for the year-do-date, including high yield.
4 E4 C3 M2 u2 a# o5 i& @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ s/ p2 S5 G- I) l
finding financing.0 ?: A7 _- V) r# q0 ^! N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 w; ]: d* v8 a: f' P O6 R$ h
were subsequently repriced and placed. In the fall, there will be more deals.- @2 ^, f- @1 }: H# y/ ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ W7 \7 d8 @) K/ a
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 k! s5 s C; i# T' c# A, Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- q! Q' |2 L. o% b9 ]bankruptcy, they already have debt financing in place.
2 V& @1 a3 k9 }! f1 s$ x European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) _9 W Z, p# l# w, T
today.& N) d. Y T, S1 `
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' L5 [$ g9 C% y, S4 N5 D0 x( t0 W
emerging markets have no problem with funding. |
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