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发表于 2011-9-17 13:16
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Current situation
" {9 `! L% N1 [, R1 H7 I: X! n The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ e' r! ~ M3 ]as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) ]2 U1 _& a) e/ G% ]+ w1 Timpose liquidation values. D9 j8 v% u5 c1 U+ B- N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ G. k9 p o, r7 v2 m6 e0 [
August, we said a credit shutdown was unlikely – we continue to hold that view.+ I. j2 [0 |, K3 U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 ?$ w1 R7 `! Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 F+ u, R- q; U$ a, l4 Y: I
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A look at credit markets5 u* m; w3 n8 S; @' U& ^2 [
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) D) B" {' a$ f! D! u X: Y5 O3 v4 Z
September. Non-financial investment grade is the new safe haven./ G2 R, u4 B* j8 _6 f* Z* C7 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 L+ j D4 ?0 ]( G+ U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- j1 b. ^6 ]% } p# L% g
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) y+ x# a/ g/ ], Y8 _4 F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& }6 y, F; M$ |, X! N! T* KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 ]5 ?- A' D" U: q: {
positive for the year-do-date, including high yield.
- t$ ~1 ~( Y+ t. _: f2 m' I& `8 g Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* r% k! y8 z9 } wfinding financing.3 E# S: |( O" s% p3 h" R1 |. r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 N% x# ]) R7 P5 T0 p9 awere subsequently repriced and placed. In the fall, there will be more deals.% l6 p% M) u+ M x$ H+ \7 f; L
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ U. @ I, F1 \8 l; @# Q( G. j( Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& l+ ?3 T7 l6 F6 Z) j: m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; c' G0 S' u9 o3 x/ u3 a' y
bankruptcy, they already have debt financing in place.5 l |7 L" s/ r1 {5 @/ C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 n/ o4 g q3 n, l. a6 D9 z; y1 _
today.
: |- W# H, o1 p2 G: O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 E! b L7 H5 T6 V8 Remerging markets have no problem with funding. |
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