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发表于 2011-9-17 13:16
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Current situation5 v/ h! _* A( {; l
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" E- L2 m0 n( I2 F7 `as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 C9 [9 d: C7 m8 himpose liquidation values.
- j; `% l5 O- q0 Z' U! l' w In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ E8 |4 U5 b9 D
August, we said a credit shutdown was unlikely – we continue to hold that view.7 Z9 B* m" o9 C6 y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 k# W$ Y: n, c9 t" R. W! Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 @/ }) \% c( _2 Y6 H; O
t2 a! b& }8 ^" l0 ]A look at credit markets% F1 I! [+ `$ z) ~0 C# \
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ ], l7 F8 G2 N- `September. Non-financial investment grade is the new safe haven.% r8 R7 v& X+ g2 G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 v) q6 W& o/ @0 @9 r3 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! P9 {# l4 h/ V9 [1 S2 l# `! p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ ~ c, A5 ?5 Q( I' ?3 C! R. D+ F0 A% _
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& c) ]" i. `, e4 i5 U9 X- g5 ~ N. D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) I: y8 |# [( M, b# m3 [3 Z
positive for the year-do-date, including high yield.
) u1 N& k6 j% n1 m8 T3 t9 G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) m# ]: H& a0 \8 `: t9 Mfinding financing./ [0 h& ]. K) A6 U0 l. x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- E) B; r; c; d. N" r/ \6 fwere subsequently repriced and placed. In the fall, there will be more deals.* H" V( H4 h3 D+ H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! x" N7 u6 x. G' T Z. p+ {" T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ Q h& r* e: {4 Q; Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# i" N9 k8 D3 y+ W' r, ]5 B5 `
bankruptcy, they already have debt financing in place.( K9 @4 _# L% L& k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
h" t$ B" H% r ]9 Rtoday.
" _& `1 g: E/ _4 R, k' H Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 r1 w2 D0 V* g2 [6 Remerging markets have no problem with funding. |
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