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发表于 2011-9-17 13:16
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Current situation9 a* M- @5 G* ]- u+ w
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 T2 T& x: J) L3 q# _$ V( n6 m0 a7 ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 l0 U! Y; x; Nimpose liquidation values.& n( [- n" N0 h7 U/ m# p: \4 L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 C: b3 z2 I9 TAugust, we said a credit shutdown was unlikely – we continue to hold that view.
. L/ a1 j- Q3 m w: r% y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) n( v+ M) @) _: S; ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# b; f0 a, b7 \* j$ V
" S$ b3 q- z8 D/ Z1 LA look at credit markets
1 V! H2 @7 A, V3 ]0 j; Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) R0 h L* R4 _4 Z
September. Non-financial investment grade is the new safe haven.# @ h u( a4 U. g! S1 l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! i1 F6 L; m N7 l. {$ B6 h
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) n' u& C5 G! i" j1 p# R3 g1 w! n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ [' m w4 h9 ^" b8 Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( S# B5 o$ C4 D) s" Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 N1 e& S; b4 h( [) M7 o( G
positive for the year-do-date, including high yield.9 N" N9 ^$ e( _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" L! O+ q* @2 Z/ v! n
finding financing.
R2 F! Q: t( V R$ b/ J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 I& }0 Q- F+ o' S# v6 K
were subsequently repriced and placed. In the fall, there will be more deals.
+ r7 T0 H8 @+ B( a Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 B" v; A4 I9 G" C1 bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 `) z+ k6 D- ~1 E0 e# d; Z0 |going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" X* P; h8 u0 Y9 ?0 e/ n: O y$ ]
bankruptcy, they already have debt financing in place.
& N! n7 a5 j6 w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" L, P2 Q* H& _3 h: P: g! z# Btoday.
+ e7 L1 c7 @7 R. P Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 s" h' M% S, e# `emerging markets have no problem with funding. |
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