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发表于 2011-9-17 13:16
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Current situation# q6 }7 N3 |- y; q5 B: r/ {! w* g3 v
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& p0 [1 T4 |0 u3 U+ V \0 m# y* Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: q7 |; ~ Z; k- eimpose liquidation values.) V2 K# T! Y2 W6 R0 `2 d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 P n; n! T; g$ L8 @" ^4 {$ `- O
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ k0 B' Y; W( E/ o" G$ V; v: h# y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% ?1 {' q0 w# x1 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
$ B0 S8 ^0 ?; U7 p. | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ {, S; _( O' t2 T. s; e# {
September. Non-financial investment grade is the new safe haven.
! o% Y% Y: M) N& Q* ?* S* f9 n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- @. E! P- \+ x/ L& m& V7 bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 y) m' s: x! zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& H$ r; z' m+ F/ Jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; A3 }& }" N l# G1 l3 x' s% h: QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: y0 z+ z3 i( m1 x
positive for the year-do-date, including high yield.( O# C$ D* m! l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( f j7 W; ? J' t1 _+ s. lfinding financing.
) Y1 J ~4 \7 M" F8 \ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: V# x- s& y+ W6 v4 |% L$ Cwere subsequently repriced and placed. In the fall, there will be more deals.2 Q4 I4 V( i$ y$ S& p9 \ \# r# K9 F; c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 o" X* }" `- n+ `5 gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: S* `0 n+ P/ d, s) a( p0 ?! Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! B9 h! ~1 P# t* ~bankruptcy, they already have debt financing in place.; B: [# _6 s2 a
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 S+ d% {$ p0 |$ ?/ n( B; u/ m9 f
today.& T, @4 g0 a1 L3 ^
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, s7 D/ s+ v7 p
emerging markets have no problem with funding. |
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