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发表于 2011-9-17 13:16
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Current situation/ e* r8 M. g4 I. K! T2 P
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* i3 R* Q: F; `% H. p- gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' K5 x" B3 B% f: Simpose liquidation values.5 P" H |6 I% Q, D# C, M
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 U7 j/ I9 I* M' n6 n4 T5 fAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 }. B# P$ R) s' u# _ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. |; ]4 l; q. I% |( L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' {7 a% R" ]# x
9 f. d$ Z* S$ f9 U- m: C% RA look at credit markets
! y: M9 `- H/ d+ S! E+ \/ d! F: F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 f7 W# I8 z/ k
September. Non-financial investment grade is the new safe haven.
" |, g( C; l! h: m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 X/ j9 m: H$ }( i- g9 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: R$ ~2 }. ]7 z9 N. p% M, ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! W; H0 \# |' }! c( d9 w
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 K) V4 Y- L: K+ e& sCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 o. {, k) L3 w# S3 f/ h/ L" [4 c) epositive for the year-do-date, including high yield.$ m; @ a! y5 Q8 D
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. v: p# o6 h( |2 R2 J f
finding financing.
/ T9 A+ [9 S( |1 ^9 ^9 ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ x6 ?. j, n0 Y- R) J. kwere subsequently repriced and placed. In the fall, there will be more deals.& B0 w3 h* ~: _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! _# h, t( `( i2 _0 T" Cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% `5 r5 Y- x. [4 E: }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ a+ F. w( t2 |% Obankruptcy, they already have debt financing in place.
! a# ?0 Q; R7 A: {% x& q! y# d European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: y% R% t0 N5 p) Atoday.5 d2 L" F: r K; ]5 j: v" a! U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ F9 t. P% M# @* i8 `
emerging markets have no problem with funding. |
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