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发表于 2011-9-17 13:16
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Current situation; n( O- T3 e* e, V7 P; Z: I
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# u7 p B. p. X5 b8 ?- F W& T
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may8 W1 d" w0 [$ T9 L
impose liquidation values.
4 U5 [6 D% h+ j; Q- o9 m) h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; K3 e+ H6 s1 V! Z6 {August, we said a credit shutdown was unlikely – we continue to hold that view.; \ m- F" t+ R( P2 K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 q2 M( x8 I y; `/ Q# n
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( j0 ~; O7 b6 F* x
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A look at credit markets2 n1 b, J; ^! x
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, t9 m7 o" h8 |9 F+ v, |2 ZSeptember. Non-financial investment grade is the new safe haven.
) x% R. W$ n; u1 j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" F& [4 @. p, Y# m( s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# { z+ f! X$ P' U9 A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" \. ?2 W7 x O' faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ e' c+ _5 M% G4 |( J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( r9 \; f$ e) a# jpositive for the year-do-date, including high yield.
, y" C. I8 n- W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# Z+ D; K+ g' Q+ r) I: y X2 Cfinding financing.
9 R2 r- O6 d; y4 s+ ^' a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 N- M& U4 ?; g) \ Bwere subsequently repriced and placed. In the fall, there will be more deals.2 b" ^4 [, b' b4 x4 k6 t
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 [: i5 ~- o$ H9 N
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ S" C$ ^" R: h9 j) ^7 b0 fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; \4 J# b7 `& Kbankruptcy, they already have debt financing in place.
* U- P/ S$ K; K' D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% u- g8 Q4 q# d) r# }0 ttoday.% j% l7 q- U l; Q! b: H' a$ v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ h( f, W; f; Q; }emerging markets have no problem with funding. |
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