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发表于 2011-9-17 13:16
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Current situation* B. V: ]' {( Z1 p% l/ g: T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 h8 E7 ^7 {5 Mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may o% u8 `9 S$ o4 {* ?( _( g9 M
impose liquidation values.
( @( Q# z& Q' U' L4 W" H- T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. W7 ?4 ~. e9 \8 M' M. }& T1 m
August, we said a credit shutdown was unlikely – we continue to hold that view.
7 o8 z0 D5 O9 _ k# s% D- u The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 d9 O5 I2 p, [9 y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
a! f2 W5 w0 b2 ~9 l Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. B, ]9 w4 t, i4 k* QSeptember. Non-financial investment grade is the new safe haven.; F m' S1 g# p$ N6 O
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, \0 r9 d7 O4 Y& p& Q- w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 }! S. a% y6 I, \9 K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' |0 p0 T) d. I' |: ]$ raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' j( s5 M& m1 H; F U6 |4 O3 vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- m* `) r+ x2 E+ { W6 e4 \/ [
positive for the year-do-date, including high yield.
( d7 l' q, x% ?" h" E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 u2 j8 ]- f G" j! z! @6 c- c
finding financing.3 K7 C- n7 g' O+ R* `& z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 q/ f; u, F+ a! v. [were subsequently repriced and placed. In the fall, there will be more deals.
2 X# O# c0 j7 M2 r/ K" o Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 A7 B: D' _" Sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) t. e/ f7 ^2 x. K$ Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- r0 U8 V. j/ T \# Q7 [( k
bankruptcy, they already have debt financing in place.: a$ u4 |2 G0 w! G" f8 N( ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: e% b- a) g2 V; H! p
today.
% t" H7 J$ K8 Z9 J# k$ M0 \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 l$ |; B+ u: b# v$ H2 q( Semerging markets have no problem with funding. |
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