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发表于 2011-9-17 13:16
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Current situation7 k" t& c1 H; r7 t0 t- e& _
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 w A% N+ G/ xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ s% l7 \) V3 s7 yimpose liquidation values.- U z. m6 O/ B1 B% Y- Q( j4 x4 Y0 {7 m
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! i, n: K" L# J" ^& nAugust, we said a credit shutdown was unlikely – we continue to hold that view.
! b: W* Z5 T8 Y. v0 e% Q+ h0 _8 I7 _ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 e$ w/ m8 i9 Y1 V' escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% S' r3 B/ }) |1 A2 u0 O0 ?$ f) Y% O' L" x. C9 H8 s' m! e
A look at credit markets( I0 Q! Y4 S% V7 a. k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ f& [0 R& E; @8 u: j! l, q
September. Non-financial investment grade is the new safe haven.- Z8 `# u( e! R% X/ N
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 U+ l- \6 ^+ R- \" w2 \8 S/ [then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: ?) p: E& b$ N9 x7 v* I
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ \6 U& Q& I# m z) X0 c
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 P Q; E7 W( v* u @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) N- ], a9 Y8 d9 \9 z: [6 Apositive for the year-do-date, including high yield./ ` u' L) M/ q) T+ Q/ n6 }. p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 O1 \; `) b% F1 |5 n7 B7 z
finding financing.
4 f O( T4 K7 A1 r2 x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ J' w7 _8 N- ]* ?were subsequently repriced and placed. In the fall, there will be more deals.
1 Q7 _0 {% ] Q, U/ R1 v0 K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 c0 w8 h# u4 K/ P$ U8 g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* w5 F3 o* J3 ]- H3 _" ^& X" Z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! c: J3 u3 a* i8 _, r" i% ^* v
bankruptcy, they already have debt financing in place.7 A8 x$ v6 G* x& v- Q- t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% e7 d D0 A A& t8 s9 qtoday.) z' d4 n) k4 u9 K
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ p M# h3 I- L* i, V4 }! L
emerging markets have no problem with funding. |
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