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发表于 2011-9-17 13:16
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Current situation, U0 V) l( W" I2 c9 Y
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ y: _2 z1 B& r$ l; n
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! v- W9 D% @ e) jimpose liquidation values.
2 o/ @' ]5 L3 D2 { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" F$ ^4 G1 A9 B/ CAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 n0 K: n. ^$ c; i, \5 B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 `7 u5 C, D* n: d$ w# q: J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 ^: ]: |* Q, D$ j
) R. Q& U/ E m% E( ~; I& jA look at credit markets3 H- r6 N! i, y& i+ A: c
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% s6 A) Y1 l; \8 F
September. Non-financial investment grade is the new safe haven.
/ X" c" H9 E; N9 l/ V! q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 ^% [8 Y2 t$ t% H) A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 }# j4 }2 \% Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 t/ n+ p& ]/ a6 V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. b4 B2 V% c0 r2 `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ B8 h* o+ v, ~ y* B
positive for the year-do-date, including high yield.7 v& U. n6 m* W& k. a2 O/ F5 B
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 o7 C3 T5 @( u$ \0 |6 b ?0 Afinding financing.1 O4 \6 o# S' s
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 L% g# H8 |' u8 S- b
were subsequently repriced and placed. In the fall, there will be more deals.; J- G/ [& B* s( j, T5 q' d* A2 a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* T8 N" }* V* _7 M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% q2 X% K1 @9 H" V6 M2 J# |8 O Kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( q; s8 u) J# t P/ a- {: ~8 o
bankruptcy, they already have debt financing in place.1 a/ y c+ k& d. l$ {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' l/ Z0 P7 J" P* W6 c2 B
today.
0 o- U C: Q h6 R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! @! g: m1 \* V7 Y% A
emerging markets have no problem with funding. |
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