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发表于 2011-9-17 13:16
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Current situation- g1 Z6 n* z3 ]; g( n+ u1 L3 }* j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
m. ]8 A8 t0 Q$ X* ^* a7 {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may$ y" k2 w* h( p: B
impose liquidation values.
; ?* k: F4 Q3 A h0 p9 \) X! x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# T9 B8 x0 R& M+ `, |3 H+ ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.1 e2 }! ~0 C8 t. {$ V( X& }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( M$ Y8 R; ^' Q; k) B3 d
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
5 I9 @9 e O v
& B! K/ u# n* G' pA look at credit markets
; z% O" q3 f4 z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' J/ V) y8 y2 L0 ]; Z& S
September. Non-financial investment grade is the new safe haven." x* N/ ?. [: I3 I& B: p$ Q! ]6 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ F9 \% Z7 X) F. w, Hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: t' ~# B; C7 |billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* s% F' n5 }- l, f, j+ Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 r* Q0 q7 b9 v) E& PCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' p+ K6 w% @/ t
positive for the year-do-date, including high yield.
; @. \9 V* u* B9 L/ f' u; O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ |+ X- Z ~! ^( bfinding financing.3 a" J7 U) _9 V, a' p; E" S1 b
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% g7 Y% \7 t- N3 q6 X6 V7 b& Z N% R
were subsequently repriced and placed. In the fall, there will be more deals.
]2 y5 n3 H7 R5 Q) @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and B6 a" C) R( d5 C; d& y! c( u8 k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 \7 l0 c/ r' s8 Z" }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) K( P$ p& ?& e5 [) Q' k2 r- D' b+ Q
bankruptcy, they already have debt financing in place.
: j; h5 N* I, A5 U European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 F! D+ P: e# c& ~- g: \3 {0 W, E$ ^today.
( ?+ H3 D7 {2 n# }: k* k+ \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 H& O4 p. `9 ^
emerging markets have no problem with funding. |
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