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发表于 2011-9-17 13:16
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Current situation1 C e3 y/ j; s, |' c
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 D6 N6 X7 `# R# W f. R! l
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. d5 C6 T# O O, m8 C6 I5 G' ]impose liquidation values.' L8 z& |& ?9 S! h. o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: r1 W" v/ P- w( f
August, we said a credit shutdown was unlikely – we continue to hold that view.
. c7 D# g0 g5 u& m: e The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; T; M% s% C# Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# k7 P$ a! |4 Q, A) ]A look at credit markets
: o4 I' X; C: D- l1 ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: c( |, Q p( z# k4 I
September. Non-financial investment grade is the new safe haven.
. G- A1 C( O- P. n6 ^ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 [8 H7 z/ ]- q! Z. T" D9 p6 b8 _" fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 }( S' A' k; x# fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 H9 l: q) I) ?! v! a# q% Q! F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# E' m# @7 l1 O
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# w# w+ q) J6 V5 Y- p8 I: A
positive for the year-do-date, including high yield.+ ^% j! p+ G1 [ X4 _* _- D# u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 B5 u, e+ r& |+ F* |" Q
finding financing.
5 v; o0 Q4 @# F; D Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ }* d1 W. E! `" w( t6 F. Y
were subsequently repriced and placed. In the fall, there will be more deals.
4 C- ?# e- ~6 r$ W8 z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 E- H c# s9 p' dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 L k/ r: M# ~ f* F1 B9 C* fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& Q0 E' ?; Q% I0 o8 Z! Nbankruptcy, they already have debt financing in place.1 K* Q) c: [+ l- `
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 k! A$ B2 y8 @! V
today.
G. `; D; s: \ k! d- L3 J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( H, W! |! n* @emerging markets have no problem with funding. |
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