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发表于 2011-9-17 13:16
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Current situation5 j9 {& i+ u) j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# T$ J5 N' [9 v5 j( v% z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% n' x8 H3 t- }+ D; }3 f; O3 Iimpose liquidation values.& O: w2 S$ _4 V3 R/ p
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* ~9 @" |) j0 N- W @
August, we said a credit shutdown was unlikely – we continue to hold that view.
* l; P! i6 \. q( L8 a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ e: H4 k4 t" P& l; m; c1 {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
9 l4 n. X7 M; I2 m- F! ]* d Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 w" \2 `/ s0 X1 V
September. Non-financial investment grade is the new safe haven." ^5 W- J* B' p1 | N4 M k
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* t( C7 P6 x" [* [5 H- fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 @) z, |! Q. h4 i0 o
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, u0 X8 c8 C# O4 faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' I1 p; c+ ~3 ]CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# |: s' W6 P3 L2 u5 M0 U# n
positive for the year-do-date, including high yield.
. a7 B. M% m2 ~6 q1 @# A1 B Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 X8 M- x1 l6 J) S( G" i+ J
finding financing.
8 a3 v2 p* ^0 K$ S w% ~) U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 K9 I' X: Z1 |' x1 j; F+ E" {; }# j# twere subsequently repriced and placed. In the fall, there will be more deals.- b5 ~" w8 Q( C: Q: w. Q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ R0 ~3 C# B; _+ b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 R) v5 e3 |, T3 Q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# v, Z e4 p9 W4 b, j6 d/ G
bankruptcy, they already have debt financing in place., B2 g6 j" j# W
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' @/ \% l% p" B. i7 X' p: }
today.
3 \5 S% h' e6 \* V( M1 d8 O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 `) t; x5 _" w8 G/ O% _ @- Femerging markets have no problem with funding. |
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