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发表于 2011-9-17 13:16
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Current situation# o4 c5 o2 W5 m5 [& Z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, ~2 w' g! L% e: ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! B7 ^0 @; z- W$ O, @ t) k
impose liquidation values.! m4 x( e! u7 y& F; b4 B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# V4 N* h9 R5 g5 g- A1 M
August, we said a credit shutdown was unlikely – we continue to hold that view.( n9 X4 j) S# T" t8 V# F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 n3 n% q0 \- q2 Q4 H: z1 t" g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. T+ Z3 }! n% q) }& v* @; F
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A look at credit markets
3 M8 L3 J9 r& S) a1 P3 q) M0 B Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# p8 b/ T8 t: ?
September. Non-financial investment grade is the new safe haven.- i# K4 X7 V5 K: U x' \& y' x! N8 T
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
# H$ R$ H' M; M3 P! t& z) k' d# jthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 `/ A* Z, J# R) ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! d4 |' l4 @6 ^! ], }2 _access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ F6 Q7 g k6 H+ FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 x% {2 Z0 F) a: I- G! T) |7 \positive for the year-do-date, including high yield.3 P- N6 R3 f$ Y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" b1 E, t0 x( p5 V+ k: z, m
finding financing.5 M; M, u4 P. e; x' f
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ c# w' O t% a, D+ owere subsequently repriced and placed. In the fall, there will be more deals.
1 P6 U! Z& r* e, ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- u( I o5 s) l% @& f9 e+ @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ P/ m8 z9 _8 `" l$ X+ Q, W/ H) |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ l6 E8 b) w) G/ P/ jbankruptcy, they already have debt financing in place. {$ [" e" [' [
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ s( O$ A. Z+ G" Y8 G* qtoday.
% x8 p V! k7 ~1 X% b! Q' o8 ^# H Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
3 q( [; p7 M" O5 d6 Q- w7 qemerging markets have no problem with funding. |
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