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发表于 2011-9-17 13:16
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Current situation' P# K1 C/ k, X* g. d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; S) v. s4 W6 r* `5 s* R2 C
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 @- x% O' B! r7 D
impose liquidation values.
. |. ?7 c; |& h9 U! R! G In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- J6 H+ M$ {6 @; l) P K
August, we said a credit shutdown was unlikely – we continue to hold that view.3 Q& q, L! X- Y7 T
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 l$ v* K1 c% Z& d) r8 k; P1 f* Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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3 b# F% E0 v2 SA look at credit markets, ^5 S4 @2 S5 W& a5 f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; |$ E9 l: g. hSeptember. Non-financial investment grade is the new safe haven.
^1 Z+ B/ U) @) V% S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 W5 W$ H9 Q0 _3 ]! X% ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# o# K* j9 i) w
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) v( ~2 d: ?6 W+ q0 aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. L5 W) O/ u$ ^& v( LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- y0 j" h' @% P3 s- F$ ]5 P. N; K
positive for the year-do-date, including high yield." {3 L0 @0 ^0 V- w; x
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 f2 [8 F4 R" v/ r! q/ g& h: [
finding financing.8 Z4 c& n& f$ e0 |% j/ T
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 J! a+ a* G K0 bwere subsequently repriced and placed. In the fall, there will be more deals.. T, Y( v- ^8 B* P: [9 z3 k
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 b8 @8 i+ Q& _$ H; j3 fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& f0 L3 i; p* T& }4 Cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* f' X6 V F" t! p' I) M
bankruptcy, they already have debt financing in place.
9 V& T% Y. z* V, k) M9 t% z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; P1 s9 M9 A! w& \" _ V) `1 htoday.! ~4 b q. T1 u" J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( P5 y- P2 F/ ?3 b8 R Lemerging markets have no problem with funding. |
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