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发表于 2011-9-17 13:16
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Current situation( H! m& I( r: Z% i! A0 r9 [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 M' R1 b1 Y& q7 z3 I5 o7 {
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! w! }9 j: d" a# D& ]7 ^, v5 s
impose liquidation values.1 H4 ^7 J: y z: t t- G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) Q% P) {# \, g% N& c
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 z) K3 |7 _6 n6 z5 q" U" C8 A The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( V2 \4 W! N3 Y9 G9 w4 g: hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 k. u9 k2 Z# h/ M9 ~: I8 P
5 Q8 o$ p1 `0 i7 |$ ]7 [A look at credit markets2 H, {+ Y% V; w7 ]& r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 T1 k' B0 p% b, w6 t6 U
September. Non-financial investment grade is the new safe haven./ s) E/ ]3 ?; u, m/ Q' A1 v, z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 N2 u |6 |$ Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 \0 K* }$ ?4 a& ~! y% |1 E9 g: {8 mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# G; |0 J3 F0 i0 c& S- ?+ y7 R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- m) @# D" V/ r- o7 XCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 r: ] w; @0 T/ B5 q
positive for the year-do-date, including high yield.3 `. X! ~2 ^, V2 C7 `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 l' e) b' P* E4 dfinding financing.! {; U7 ~8 e' i* O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 ?. P* f, C( `4 l+ P* R% i' Fwere subsequently repriced and placed. In the fall, there will be more deals.
4 u( F7 ~! f: s0 Z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. J8 t+ T' ?! N7 J! }; i H. Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ v4 c4 h' ?3 T; b" ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 ]; W/ j0 M2 ^9 Q9 P- [; `$ b$ @
bankruptcy, they already have debt financing in place.
) c. u/ g+ }. n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ d; \; g- d8 Z( J4 W' Itoday.# p! A3 M3 A0 K, n- R! F1 }1 z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
8 J3 m+ \0 Y9 {) s; i, Xemerging markets have no problem with funding. |
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