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发表于 2011-9-17 13:16
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Current situation% m# a; `& |5 J4 p5 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ A9 N; s5 m' c1 P1 q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may$ s- `& k: a/ P& A9 m# C, D
impose liquidation values.- I. P7 D. [( E. k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: [) X& x) X. [) Y5 M" D
August, we said a credit shutdown was unlikely – we continue to hold that view.- B8 Q0 y' f9 W4 A% C, P, v8 k% }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( N, t& K0 D% K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 V/ e. ]& o5 V1 D% ~+ nA look at credit markets: O! G+ u9 A( B. ~; J# N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- |, m7 R- x) A; c& g$ U/ SSeptember. Non-financial investment grade is the new safe haven.
/ Y: u+ B& ^- ?% E/ R. l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ G( u3 U2 [( e5 L9 z( ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ g, b3 F1 e( Z2 N
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, {# n$ y! |# V: w) X( q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 ~- S& Z; Z# \2 [1 B/ @$ I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are& G' i8 h: C1 f V+ L% B
positive for the year-do-date, including high yield.# D( h% ?/ M. S! C0 \3 s' V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble [3 X5 Z- @. h/ R/ O" v: [, f
finding financing.
W1 g# T( W2 e Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, J5 G/ u8 ^7 `1 M# z! N$ W
were subsequently repriced and placed. In the fall, there will be more deals.1 e5 \: |4 }, u0 K5 x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 C$ o v+ c! u8 y8 z* @7 i' b( Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. R/ W3 r; l+ S9 [ ?
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! V4 S Z& @) b4 k% s
bankruptcy, they already have debt financing in place.3 K) o$ p: s: Z/ ^5 O F
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# Y2 R: _" [3 V/ d
today.
( f( d4 V. E( z& i: f6 ^9 q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 d" l+ m6 N; Z. K$ P7 Temerging markets have no problem with funding. |
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