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发表于 2011-9-17 13:16
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Current situation7 ~% Z/ E$ Y4 t. B
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ }8 Y1 d, T- |% q' g. [: \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 c3 a6 t( Y+ }* Eimpose liquidation values.
+ ^# Z3 f4 C' h; h6 f In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; u. A7 U T+ Z8 e
August, we said a credit shutdown was unlikely – we continue to hold that view.
3 C$ Z8 v( f3 r8 h The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, Y( q/ P X9 F8 l4 J- o+ `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' Y2 A% O) X+ `4 n4 x( P5 K) V3 z
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A look at credit markets6 P. K1 R3 i; y/ z$ E1 ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( O' W6 @4 g# n: J9 ^September. Non-financial investment grade is the new safe haven.
- n q. M( U5 c' z, M$ {" y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ y: D1 t/ U& q9 d9 e, K. \! gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# t! L. h' `' n- x
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 U7 J& }! {* T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' H& W, |, L8 g1 c4 D2 HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 t5 m% }% S1 X/ W: h
positive for the year-do-date, including high yield.: d% {) ^$ f( s& y4 y. p1 O. M
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- W9 ^, l& V7 v! s# O% g. Vfinding financing.% o5 e. Y+ c5 e/ w: r$ m
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) p8 [+ p: R& o7 c* Bwere subsequently repriced and placed. In the fall, there will be more deals., h6 `6 y/ a" E6 {
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& F1 P2 S1 k0 w2 _8 Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' A9 N5 {( y8 F( t* T9 @) d+ h# [1 {
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& d0 s+ E5 J% q, N7 p: T/ F: I
bankruptcy, they already have debt financing in place.
1 M: @$ }4 Z1 E! R& G1 C* Q. @ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 d. A3 W* g% \# Z) Hemerging markets have no problem with funding. |
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