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发表于 2011-9-17 13:16
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Current situation0 Z2 z% o1 F- P* G: f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 W4 J4 d* r7 q+ O/ V( z; M! X
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( A+ W! ?' M/ N0 ~; p: limpose liquidation values.. W( |2 h8 ?2 ]. e8 h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ B0 E% i `* I. B6 G
August, we said a credit shutdown was unlikely – we continue to hold that view./ }" K( N$ O+ X0 D4 u# i
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ O$ Z9 a' D" y: r6 g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 c2 Q. \7 s5 U$ `% a4 G! d- w
, J' C$ X/ g5 D8 PA look at credit markets" B3 S0 J# s7 l3 i& P" D! C
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in M! c$ B; |; o, g' P
September. Non-financial investment grade is the new safe haven.
8 l4 _6 K+ s8 a- Z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( t2 a- R; P8 z/ q5 M
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& C: S( A; S/ A: r {+ qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 D# a: v* C' b; S' s
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" L6 {3 r1 n; Y) s o" t
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 T2 o% ^1 c' ~/ O" M0 o% A8 n
positive for the year-do-date, including high yield.
! c$ Q6 X; H7 _# r* H5 N, Q" B Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# G, C! H$ d6 m% e
finding financing.
/ l$ _ ?, x# [0 X2 X0 o Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* g- D* E( x5 M$ u8 y% N5 s, I! y
were subsequently repriced and placed. In the fall, there will be more deals.
7 u! p; h* W) C0 q" g- G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, l; a/ M1 [# q! j/ r% b: L1 ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' |3 }) R8 F# ^% H& E% ?4 B% z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ B0 f$ }" s- g/ ]' `
bankruptcy, they already have debt financing in place. c6 D2 d% X3 c. {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! ~$ W* `' h/ x
today.
5 w% v. k& q1 S) m* Z5 A Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 e" B. k2 h) b1 N$ A: pemerging markets have no problem with funding. |
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