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发表于 2011-9-17 13:16
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Current situation
& @6 l" r5 Q8 P+ p3 ^7 v The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 t; V6 \) u- b$ z* N3 ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 [, Z- a" B% z9 L1 F$ N* O" |/ nimpose liquidation values.* @ w2 Z l6 P- o8 X- A8 k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) W3 i9 U0 r3 r7 P
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 S% l+ g- D( b9 o' @- V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% n$ D% O3 C, e6 N2 c8 u
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. a" l; b/ W5 N9 x4 `A look at credit markets
$ l! O# X- P& s5 f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) A9 ~+ D/ f. w5 rSeptember. Non-financial investment grade is the new safe haven.
7 M* h! }. S4 q( X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: \/ d$ m5 A& ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 p8 T$ d0 b2 G" f$ k' H) n+ K$ _
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 t, \* r* T* q# h/ Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ h" q/ o6 i9 D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ S; |# u5 h- s" F6 O' B6 O. gpositive for the year-do-date, including high yield.
6 g/ |& E/ j7 ~: i# O1 M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 ]7 `( A% \& y* Q
finding financing.! o' j# [1 h* C# u0 P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, V& a9 A8 U1 a$ x0 Pwere subsequently repriced and placed. In the fall, there will be more deals.
. ^ v8 o; M' M Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ A/ b" U, ~* i! L8 @8 m9 V( X4 dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) c# m: Q, g/ A! O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 y$ k4 y4 V! k, o$ e& F! kbankruptcy, they already have debt financing in place.
0 p% h" a1 \7 I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* L5 P/ G% } E. u& G9 ~
today.
' ?( l/ }" a2 p5 Y& J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ ~ ]# |/ Z: [! D3 ]/ h. i
emerging markets have no problem with funding. |
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