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发表于 2011-9-17 13:16
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Current situation" g% Z# S1 i$ I
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 w/ \' h I7 Yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: @& P3 p, _ nimpose liquidation values.. k8 \3 [+ ] v: `% g2 |! o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
L7 `0 ~' L* P* o+ aAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) W9 y$ ?$ I6 n2 Z! p The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 I5 B* K4 ~$ J6 Q [0 R# escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
Z6 ?2 ], ^ e( j9 O. P" I
6 j% S: C! o+ f0 s" C$ |& r! cA look at credit markets
) Z/ C6 @' r$ z: T- H Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% a' K3 V2 j6 o0 G: P+ j" x0 r+ q9 v9 m( PSeptember. Non-financial investment grade is the new safe haven.
6 X* g( k/ ~! n+ X* u High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; P1 z+ J8 Z- Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! K: B5 R" Y# ~9 B+ Hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 p2 E5 F# N# T( i# X' T1 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* w8 z) r9 n6 K, W/ m2 B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" N# c" E' N# l5 k
positive for the year-do-date, including high yield.
, x- W& i, T, P( b: C! y4 `' _+ e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, N) T0 Q0 i Z0 @0 @
finding financing.* C: B. W; p/ h% M: E& k6 [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 z! n* S! a: Ewere subsequently repriced and placed. In the fall, there will be more deals.
; `0 P9 ]) V, r Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% O% M5 P. k- Z6 C7 L2 y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' y6 p$ J" w1 d% l {going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# x; K' n# j) ~
bankruptcy, they already have debt financing in place.2 S R9 X6 }1 ~
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; y+ V$ z. p' p& \8 i b( U- g- wtoday.) ]7 n( {8 [+ T' x* |( U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 ]" }3 S6 e, F
emerging markets have no problem with funding. |
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