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发表于 2011-9-17 13:16
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Current situation9 Z5 {# M/ }, \) Q) D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% R3 K2 n( n4 a8 k* C& X' o3 Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% j3 ^4 e5 x' u. X
impose liquidation values.
- b/ n( p( e- f6 C0 h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, r- T7 V( U' g$ z! \7 L# I
August, we said a credit shutdown was unlikely – we continue to hold that view.0 r& w8 j0 k2 z8 V# C" Q9 c
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# m$ t" K/ A# b4 L" i" J5 ^
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 E% ]3 x: G/ m! \- v2 t
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A look at credit markets
6 Q9 a, A9 T4 \3 A0 O/ a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ @& P, w' b' _3 o; ] F% `
September. Non-financial investment grade is the new safe haven.
" Z) E5 ^. I7 r( l" `4 x High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 G' e2 _0 c; |' t: [) x5 T" r
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) r9 R F( j, s3 F/ X: `8 @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, j9 E* D ^, O' J7 j ?* }: Raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 U+ N% _4 x# X; B# W& HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) x; b, o8 A' J; R$ P
positive for the year-do-date, including high yield.
" E0 ~- S) L- R5 F3 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# M [5 _" h1 S, P# dfinding financing.+ h" b) E! C7 s- S' I- h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 m% N! _/ U v# v8 S2 h6 _/ s8 I/ u9 L
were subsequently repriced and placed. In the fall, there will be more deals.
* F( a2 |' U) G& y/ I2 L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; S. F2 ]3 M6 Z3 ~" Y. O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 j7 |! A l' p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. \2 p+ v0 p4 |( g7 G
bankruptcy, they already have debt financing in place.4 O( h" u T, ^/ S7 D% F% g
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% x& R3 R& \* y
today.1 L1 b; ]! B' p0 e' ]
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ q% l" r9 \3 R
emerging markets have no problem with funding. |
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