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发表于 2011-9-17 13:16
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Current situation
: S+ u6 G1 n5 P, T3 {! d' J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 m# X; K: X: Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' l# o$ v& c; D7 _9 X- G/ S
impose liquidation values.
) c# P# ^, z# Z/ ]3 V: N4 z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 |3 P: n4 G! c6 r8 ~August, we said a credit shutdown was unlikely – we continue to hold that view.( y. e+ F/ l. v. X8 d$ t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% N0 M1 C* b" V5 t
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ P* n5 D5 J9 L: v) a0 _ v7 P3 V
; j G+ d9 P& T+ p3 _6 FA look at credit markets) Q: y9 D- X- f% T- H/ |7 \8 s5 ^
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 a; J1 M1 ]: h! b& n+ n- v; [2 a
September. Non-financial investment grade is the new safe haven.( J9 G/ `8 [$ r: @, I
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 Z; A( t7 E/ u' `
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 m: S3 E0 L0 g" x" X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. L% ?1 {' E( T4 l6 x- Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ N, d7 ^# H7 {* l3 G' H$ m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 ?3 o& L& p+ L
positive for the year-do-date, including high yield.2 d+ ]& P; b& I
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 u* {4 K& T8 b7 S) i! U& ~
finding financing.
2 q" |2 L4 [. P: i9 {7 W0 N" k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& Z) B. g9 u# }. L5 Awere subsequently repriced and placed. In the fall, there will be more deals.) C2 }: r. f* o) K4 Y1 `/ w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: S1 k# W* M% ?: ^0 G' sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 a% W) Y/ d; u
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for [% F! x, E4 F, Q% ?; J; Z1 h# M
bankruptcy, they already have debt financing in place.) G3 h' @1 d# w+ u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' L5 y- j% J8 [3 ?0 U4 y) Dtoday.
6 a5 W8 F" h' z/ l4 h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ |- _4 J/ F+ q- a# M
emerging markets have no problem with funding. |
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