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发表于 2011-9-17 13:16
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Current situation+ p5 \+ \7 ]9 J* J( n
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 e B( G: v9 r* ?
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- J. B3 A5 u2 `* b+ n
impose liquidation values.: `+ T8 U4 ?6 B, b" g; v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 R+ y, s9 N3 C" o7 T* w" I9 _August, we said a credit shutdown was unlikely – we continue to hold that view.
7 f1 H" o9 i+ P( x8 s! H$ J The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ V) y" l9 p# j8 B4 d3 W% v4 Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ j6 a1 `. k" @4 R; [( I8 |% Y9 N) k( x8 J
A look at credit markets. Y/ B4 J& j" q+ b3 S% d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% j' Q9 t6 x. uSeptember. Non-financial investment grade is the new safe haven.6 D' Y' p% J- c) B5 b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 Q! x$ Q' c: M( s" @; r) _5 othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' N1 o' z6 |$ m2 A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( J" L3 t; F- d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ b- O8 T2 u7 v9 K: _( c& E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ i. |9 i% p: R. y* [positive for the year-do-date, including high yield.
5 V( }; w) g) {4 n6 }( V Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; P. J* U; w# n0 r. y5 y% E2 e* k: Ufinding financing.
4 D$ X# u$ i0 V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 w& b8 E3 {6 c2 H
were subsequently repriced and placed. In the fall, there will be more deals.- ~1 |. _$ Y" k/ I+ v
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 |8 Z } `* @7 Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 m/ R1 W2 A" x' [) G2 {6 \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& }; w" S' R8 I$ i9 T2 p; O' Zbankruptcy, they already have debt financing in place.
7 Y4 R5 l! A% i6 X European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ D9 |+ N1 u) S0 s5 btoday.
# {0 k# ?8 h( W, p0 `0 z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% x- q1 M( _" a7 |& ?0 L
emerging markets have no problem with funding. |
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