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发表于 2011-9-17 13:16
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Current situation6 ]6 U: _& V* w# D) d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
m% ^- m t1 L: Q4 P K, Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ O2 P2 j, _. P5 L4 Y3 Zimpose liquidation values.
% H% D- c" `/ v% ~/ u# X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% S/ \! T9 n4 |/ k" o/ z
August, we said a credit shutdown was unlikely – we continue to hold that view.7 D8 u0 |1 |* @
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 u" W v- {( O; C* V. Mscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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! G& W; u( T) |( J- k+ u; A& sA look at credit markets+ Q2 P4 B) P& P8 m: R+ M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" U* b6 U0 J, I K% p2 v- _
September. Non-financial investment grade is the new safe haven.
# W0 V5 _% z5 J0 V4 k# V6 ?# ?+ s7 q& k High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' V9 Q8 }" H# x; gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 C: B. i$ S! G% a3 [* Z. r# ?$ @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; S2 l% i- e; Laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 {5 Y/ s. u) ?$ {. ?* ^+ t
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! A# v# }2 p8 i* y `1 G( g
positive for the year-do-date, including high yield.! J6 K* U8 \8 u* B n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" ], P/ G, g- z$ d& x
finding financing.& O) i0 o, ~) j4 N. O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ @" f7 i( y. ^9 R( \
were subsequently repriced and placed. In the fall, there will be more deals.2 l# h/ z- V" A( f
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 }& t$ C( H4 s. g9 qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 }. W/ Y' C- X+ A& q- {! d+ i% vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' `6 \ y7 f. o" d; f' g
bankruptcy, they already have debt financing in place.1 ~- S% W q& Z- ~* H% k _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 Y! Q. L+ w5 m I0 n5 i1 A
today.5 |8 V; s; d# L3 g$ Y# W
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& M0 n. E) M" T; xemerging markets have no problem with funding. |
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