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发表于 2011-9-17 13:16
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Current situation0 T5 l3 d7 l& {( b0 S* c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# i4 n; H& a3 Z6 R- _
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& x8 K, ]' C: ]2 \6 kimpose liquidation values.* T& P+ o r+ B5 }
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 z6 l! K! n, V- K! `! c: W5 }+ NAugust, we said a credit shutdown was unlikely – we continue to hold that view.
3 u! c+ G: p; B- @ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# z6 Q8 x, w) W, d0 I# `scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 F& T* R5 O }9 O) {5 X+ b& P
2 h% \- ?. |4 Q1 NA look at credit markets
* ^! m, k3 q) J/ [8 I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& v) b' s- [8 Y# A' C1 R) tSeptember. Non-financial investment grade is the new safe haven.- Q, K! |$ m% r7 T6 U% M2 Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 m$ w/ ]4 M* g3 r( M \8 G5 T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ T$ G0 R4 K8 g8 N* U8 x, Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, M, d- ~3 w- o- t6 m. |3 Taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( ]' ^8 l- J4 v5 E9 K' g |CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 } [7 a9 ^1 H
positive for the year-do-date, including high yield.
" i4 |3 H9 h& E# a' P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 W* m# z, T5 P+ A" n, T
finding financing.
i- H! i2 y% R9 U7 Q* c$ }7 R+ S; M" C Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 E* t* F4 q4 E ?$ O/ M$ z* }were subsequently repriced and placed. In the fall, there will be more deals.
! Y' y6 k2 {2 _' g. s Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' e, S: w8 ~/ l6 }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 B% u( z/ y2 x+ f! H
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) D: |) O- H, H& P: ?! K9 N9 K" i
bankruptcy, they already have debt financing in place.. u: W; d1 r) t# G; ?0 a# J
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 H) L. ?0 H( ?2 Ftoday.) I! t0 p6 v1 k4 _; c
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 h# `; O2 e& h1 b( Oemerging markets have no problem with funding. |
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