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发表于 2011-9-17 13:16
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Current situation2 M9 B' q2 t3 u& W1 H) U
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ X O: ]3 K% v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- `1 S+ d" D/ {+ c" U, B
impose liquidation values.$ g5 u, |" d9 _- b' n5 ?' g3 B3 e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 H/ p. {6 u5 P: }" G% dAugust, we said a credit shutdown was unlikely – we continue to hold that view.( F% |: m3 D* s8 F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" r1 J: m# u/ zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' g8 L+ q7 v- r4 e& u* z: G$ T
y' ]# j. w% F/ V' ]- H8 Z5 mA look at credit markets
9 f! w5 K1 M0 F ?! y5 x5 d# j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 t6 f- ~ a9 C6 G( Q0 QSeptember. Non-financial investment grade is the new safe haven.4 A. L3 o) G( H* B+ N9 f: S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 X0 |5 Q+ y; V. J0 Tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" W5 `2 g4 b3 [& H" U0 e1 l) Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 W9 x4 S( I9 W8 L& z% p( P
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) V6 @7 b( @: G7 a [4 f5 ]CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ J m: B3 v" d
positive for the year-do-date, including high yield.; O/ e3 ~0 d& O6 {) t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble) }7 F z8 q8 M8 W& g# R! {
finding financing.1 N. c9 m8 z5 u5 c( C; \% F' _) b4 r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; t; E; m7 Z' l6 @6 xwere subsequently repriced and placed. In the fall, there will be more deals.6 g: C/ ?& N( m4 n' j+ P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 T, _5 `7 i# u5 \: jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 s- [1 m, f. d3 x: h3 e% y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 U. `7 `7 K: \: U9 B+ |* h
bankruptcy, they already have debt financing in place.( o# L% t# b# }! f7 _! z( f
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 Z" U( l$ L" E+ ?! u
today.
C% R- |+ m# f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 i2 l8 q3 N, ]; }+ p7 t
emerging markets have no problem with funding. |
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