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发表于 2011-9-17 13:16
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Current situation' Z! l/ r) G4 z8 Q" I$ r
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ v) R: K- `) g3 A) V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 P) }' |6 y2 q7 w1 T# ]% j# ^6 U
impose liquidation values.
7 z6 O) T: t/ R1 f In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 A! Z u, {! z. @& a- XAugust, we said a credit shutdown was unlikely – we continue to hold that view.- p5 W8 A" k9 y! i1 [( J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 _* d$ F) S8 d- z2 H( r; w& X
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
# X* Q2 q7 y6 S5 l$ y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, U a6 i% @& o9 N2 S/ K7 XSeptember. Non-financial investment grade is the new safe haven.
4 ]0 j( z) R& J k5 o6 `7 @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 V4 }3 `9 _' O8 L1 Hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 z* z) a7 I0 P m0 Hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& ^. \& d0 ~. N5 Z: z, W! ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) h% B3 D9 |- q; g& O4 cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ n. |* g* b, _0 U; J
positive for the year-do-date, including high yield.* _& s& _8 t; K1 p3 K7 b
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 d2 a5 p7 ~5 o M, R) V- H
finding financing.
6 {6 n3 a2 v7 [9 z& T% O: A' ]! I) q! D. ` Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 q h3 N$ ~0 v
were subsequently repriced and placed. In the fall, there will be more deals.6 @. i$ W) d7 J/ M4 ^# C# B
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; v0 P: n$ r/ ?/ v s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 i$ }2 X! J1 @+ ~( s: D |2 Igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ Z3 d0 j) v; ebankruptcy, they already have debt financing in place.9 F# l3 v" N1 a: U' L8 A- _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! f2 A) h8 K$ Z |* w9 Ytoday.
3 M: c+ A" y& | Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- v0 [2 ` o& K2 t: }+ z: yemerging markets have no problem with funding. |
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