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发表于 2011-9-17 13:16
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Current situation% G2 y& Q& ]& q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 ~: |9 P2 _2 Q. } }
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& K6 G- a3 n5 z, g6 Limpose liquidation values.
: J( l8 g0 C$ V. E8 w& i In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 W. \. b" J. T: f5 g% W3 KAugust, we said a credit shutdown was unlikely – we continue to hold that view.! x8 w$ }# \1 v4 b0 a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# p+ E) d9 ]* l1 D3 Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% {' O) L/ n2 x$ d- _$ O
: {4 m% l4 R! [; B; CA look at credit markets
9 A/ k/ ~" l# l4 t- @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 p1 u/ J5 p, O. e) d7 w
September. Non-financial investment grade is the new safe haven.$ h/ ]# J% S2 r; a9 v# H2 y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 W0 y( c, {" q+ h4 dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; f2 `0 t) _4 n5 F. b8 pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 ]6 G. u: ~$ [# G( k7 V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* C3 Y e+ L- p5 Q2 ~0 P
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
~$ @( H) T/ r. Q' Ppositive for the year-do-date, including high yield.
' G6 W1 f# ^6 G E; y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- O, J" z. ?" z9 }! dfinding financing.; j$ t4 F1 n( w B. x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# I5 E; T {( Z5 _were subsequently repriced and placed. In the fall, there will be more deals.
- G3 h9 s* D/ o, Q& c Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; H: P$ f" V2 L0 iis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ U+ e0 E5 P t+ U" J4 `5 L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 P& {6 d: a3 e1 Bbankruptcy, they already have debt financing in place.
- } V3 Y" r; D4 v3 g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& G, j% U/ X$ T( J0 C2 C
today.
# I% @8 b5 p) d2 c6 d5 d. |7 |$ x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 H- n; t( v& v u% iemerging markets have no problem with funding. |
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