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发表于 2011-9-17 13:16
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Current situation
6 z' f! N* Z) m2 Q- K The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 R" f1 D. T* y1 [1 B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may ~; W6 q( S( o- F( B. S
impose liquidation values.- G W' o, g, X' K' F- J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 s2 y, s: d( C2 [ A) T! rAugust, we said a credit shutdown was unlikely – we continue to hold that view.& a* H! S2 J7 Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& M8 [4 l$ a. Z$ K4 o% Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- ^# \- C. _" _5 Y% r; OA look at credit markets9 G) N, F& A4 V3 H
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- g8 u- L$ l) USeptember. Non-financial investment grade is the new safe haven.
! [& M% |9 b3 G) | a High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
# S. e# y8 {: H/ \, R# s: mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: V8 i' }" W: z4 b4 M' T
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 o+ ~# R1 F$ ]& J) R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 T& w# P' x' K3 c/ j$ LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' L P" T5 N$ L
positive for the year-do-date, including high yield.
2 [2 [& O* Y w) N5 H# b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 ?. W& _) [, C4 }3 m u2 ]4 ~! S* Xfinding financing." _, B8 B6 W7 z3 ]! n8 D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 E" l) K8 e7 f# @4 Pwere subsequently repriced and placed. In the fall, there will be more deals.
8 G! j E. {. Z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. {( p T) Y; P8 T3 { C
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( r# o/ u2 M& G' ~/ L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( x& U& t- S4 a( C( x* s; Vbankruptcy, they already have debt financing in place.
5 @6 G9 F3 s, F' \3 H0 J, { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, O+ ]3 o) p& `! C5 n% ytoday.. y4 i6 Y9 U- k$ Q1 ]/ _" _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- u9 Z, j1 p( \) oemerging markets have no problem with funding. |
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