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发表于 2011-9-17 13:16
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Current situation2 o' e# r a4 P- C6 y" B: c( C) ?
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long! J! |2 n% Z2 p: L, Y# g
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: G. |9 ]3 N& R5 }- q3 P! \ t
impose liquidation values.) ]3 ^. ]& f& X3 z% e/ v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) q" S' t7 o% s
August, we said a credit shutdown was unlikely – we continue to hold that view." Y) |2 r/ h3 o0 F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 p" F1 }2 u O2 O7 k. e; N2 vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., ~' K; ?- [9 ~- T
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A look at credit markets, j) t3 Z0 F+ |6 e9 [- {7 o# P
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( y( t m; }9 W0 f
September. Non-financial investment grade is the new safe haven.
' t G5 } R3 }' ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 [+ P4 x' o5 [then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ z- s) }) ]3 y U8 K) o$ fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have i) T8 x2 {, g$ r- D0 V0 A
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) z' [9 b. Y5 ]; @0 y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 {8 U ]' ^4 M- P, ?' Z. opositive for the year-do-date, including high yield.+ y m8 s2 P9 l, k1 |# m# Z. O
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 m/ v8 {6 S" q3 d* @7 S
finding financing.
7 z4 I! f, J/ j; u5 [" @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ A/ W- m3 J; Cwere subsequently repriced and placed. In the fall, there will be more deals.
' ~5 R2 P" @& q9 G3 u [5 R+ A- J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) W8 ^8 x' w! k4 y+ d- d
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 f p3 s" ~, {# a9 V0 sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 g7 h, @5 O0 U+ g8 nbankruptcy, they already have debt financing in place.8 z9 Z0 X& i" a/ ~9 [5 q6 f" m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 I: f0 O5 i8 h2 w& F; O- W- T
today.
4 b: W& {" J7 W2 i# F+ y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" p/ z1 P0 v5 V6 }4 |
emerging markets have no problem with funding. |
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