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发表于 2011-9-17 13:16
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Current situation9 X" t' ]7 z$ z+ p5 C* `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. `/ U2 _. |& `
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) k, d1 R1 Q+ D/ S0 Y
impose liquidation values.4 G% G, N$ q: I/ {0 k0 y" B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' y+ K: T( X0 {6 LAugust, we said a credit shutdown was unlikely – we continue to hold that view.
w! b- V# v! } m9 O* x# g- R The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& q" A8 a$ B& h3 f+ b% l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ W' X* e7 t( A. p0 L* C
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A look at credit markets. p7 |4 h, v' G
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 q" s6 p; s" p9 }2 |" \
September. Non-financial investment grade is the new safe haven.
8 U/ s, }* u. ^6 N4 D+ R! Q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 q8 e2 C$ n' H! W, Dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 R. S6 _0 m, b abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) U6 g4 W0 S" Y1 z/ V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 Q8 r, E8 x1 P6 d# s7 W8 z& n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( ]; S! W- z4 i
positive for the year-do-date, including high yield. x, r" Y d% P V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 O! v3 f* c7 {0 T; J I6 J) ifinding financing., P( Y. `2 o: L' L7 j( K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* c0 p( W9 }! J& v
were subsequently repriced and placed. In the fall, there will be more deals.
- t: O Y6 J" p Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- G4 Z. Y9 m3 |+ ]5 z/ v: Iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ V l* \: V9 ], o& W% T8 \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ X& W9 H) L% g, i2 b* d" Q, I4 G6 E
bankruptcy, they already have debt financing in place.7 a7 M6 [5 t7 C' Y2 A! [
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 |! K$ N! A3 ~* stoday.# h& b7 v) S: K/ G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& j1 x+ Z; H, Cemerging markets have no problem with funding. |
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