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发表于 2011-9-17 13:16
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Current situation9 [0 \# ~- j0 B
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& K0 [. h: l/ L6 W. l( t
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ S7 I0 f1 G; p- b4 U) Q3 I3 Dimpose liquidation values.$ O, ]$ t8 Y$ D$ B {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In" ?- @, n/ u- i) H
August, we said a credit shutdown was unlikely – we continue to hold that view.
( n( C, n% v& z7 c3 y7 f2 p9 c The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" d# K0 |& O8 g& S. |# Z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( o7 r5 { I+ |A look at credit markets9 a! s: x, g/ j7 g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" k2 L0 I6 [* w' U/ J5 c9 w' rSeptember. Non-financial investment grade is the new safe haven.
6 w* U& U0 x3 \! M) a. F High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 K/ W2 K1 _7 \2 Q! |4 A. M: ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- E% \# F3 v7 u! {) d1 p$ f8 Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have& `; i1 e/ {0 a1 c6 e
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ ]. A) J* L/ X. yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- S& C3 s" S4 j0 F) Q9 D+ x
positive for the year-do-date, including high yield.
4 M: D" }, z# Y* s% c* L, y: B; m% e Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; B f3 L, W' z1 F. C: `& e. ]$ M
finding financing." |' J) B& V0 P/ U& S2 F: F# N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 ?* J$ T# b" \3 Mwere subsequently repriced and placed. In the fall, there will be more deals.+ ?: T% p* V1 F3 T* I: `7 |' D7 h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& [6 K' I( m, {3 k, Eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) ]4 I5 M, r# q8 O! @going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- w5 s" G+ i. s/ y `3 A$ X) n
bankruptcy, they already have debt financing in place./ ]8 _+ m6 V3 s P
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* v& N& t$ K8 F- u& q5 F/ g7 e" e) E) B
today.
9 X% w8 T* z C" W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! P0 [5 K8 k8 {' W9 m" f+ z) i+ I- eemerging markets have no problem with funding. |
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