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发表于 2011-9-17 13:16
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Current situation" D# i; v, c' @
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ D4 [6 F* g# ~0 {5 ]! R2 }
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 w9 G/ H4 ~3 O% Y
impose liquidation values.
, F( a# A& ~, k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( Z4 A5 k# @! AAugust, we said a credit shutdown was unlikely – we continue to hold that view.
9 P4 b) ~1 r+ K. L; i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 ? a6 f* a1 T9 }! v& O
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* L7 W; T$ w) U
1 ]. w4 X9 b4 F* BA look at credit markets+ M. Z; p# ?( m& M; E _( T
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ @7 R" ?0 v" e! h
September. Non-financial investment grade is the new safe haven., ^1 }9 g# w% _1 L+ Q' `8 k. r* l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* e" q. O3 k, N8 r$ ?" zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% K/ [* Q+ g. V2 C. } i2 Rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 H+ G' d' ?+ f% ~$ uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' g( ~, @0 @. V$ m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" E8 {1 S3 t) ]5 Ppositive for the year-do-date, including high yield.' L6 m( Z1 J% H
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 K# ~( M7 H% u5 X" Pfinding financing.
- v- Y' H* q) P6 p6 H. k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 a$ j, `9 i8 K' n- c% u8 \
were subsequently repriced and placed. In the fall, there will be more deals.
9 O% I6 a: t6 y- Q" d: o Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 B0 _' x9 Q( C- C P
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: p7 y; B0 t0 `9 n/ d3 V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" B b) L, ?' O) Cbankruptcy, they already have debt financing in place.
2 P" n' f( e( ]/ E" r) u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& X c- X: {. |& m# Z& t. Ztoday.$ r. x Y* u' C; D
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: a7 `! @ q. K* P3 I) Vemerging markets have no problem with funding. |
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