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发表于 2011-9-17 13:16
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Current situation# v" O9 W8 y9 ~3 |9 P% {
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; g6 A) D" u4 {3 G
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! M0 T2 Z1 C$ K; }1 X; O
impose liquidation values.
: B, p+ B; L5 o0 z; Z; E3 n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' m$ }# B- I/ z. |9 YAugust, we said a credit shutdown was unlikely – we continue to hold that view.
. j, u: H- l/ ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 K' Q) s, N# N( y' X6 x" f [scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
) y: ?0 x3 |: a1 @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) [7 k* S5 [; sSeptember. Non-financial investment grade is the new safe haven.
& v/ \6 q3 P. }4 F/ y% u/ v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 ?/ ^& T# A. ^ b% h/ v* Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* t7 T8 i; F) Y, {5 Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; |) l3 J; X1 c" h1 m8 ^) `& qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( C4 {: G# l* u6 x3 w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& d, A3 i% n/ f& k" {positive for the year-do-date, including high yield.; ~1 W- P. c% d+ K$ I% {7 }& z& I4 I0 l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 k7 l/ O- f$ `; ]
finding financing.
1 M# ]* K$ l. n' l# G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: ~2 ?. C( [) Y) X) Fwere subsequently repriced and placed. In the fall, there will be more deals.+ j( ^6 z7 s( z$ E- W, c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 Q. M0 L. f5 I. V- _9 w
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 U4 O% V1 S! c N6 ^: }. h( i% r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- q, _+ o. f; u4 p3 c
bankruptcy, they already have debt financing in place.
, ]% P( }# f' s. c9 i/ v! B) I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 q# I( ?* u3 W5 l) e+ Q" K; W( W! ztoday.
8 N9 C4 l0 m. |- H) O$ l: C Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) V. n s4 w2 X) w6 a
emerging markets have no problem with funding. |
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