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发表于 2011-9-17 13:16
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Current situation# C9 n- Z$ K F0 K* w' M% \
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; o+ @# \) v& I# | e+ B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) Y( O8 n0 ]/ C0 e: p
impose liquidation values.- _! n' K" L2 f. @% p
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 K! ?/ G- V$ j9 M h2 q1 a% f
August, we said a credit shutdown was unlikely – we continue to hold that view.. h) y6 ?8 |& \' H) ~/ l! z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
i$ V; S# s. s) B, T: uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( S' e% U, ] l2 L' e( BA look at credit markets0 H/ G( g; j8 Z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 h# `6 ?+ g' x$ k# A7 nSeptember. Non-financial investment grade is the new safe haven.
& C3 e% }% s' j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 H: K6 c1 s) X* c5 Q1 O6 Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 C* p0 S+ A1 T H- R
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' X) M7 t/ h0 b8 I% _8 raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) L2 Y8 w; h5 W) g$ ^9 \$ [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; e# o1 X$ e9 Npositive for the year-do-date, including high yield.
9 l' A6 I% V7 [2 o4 m# q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" G6 s. k) ~7 s" e# t8 _
finding financing.* Q+ b' B. C$ ~9 h9 z' }" g$ v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( ?! ^0 q5 f6 i0 twere subsequently repriced and placed. In the fall, there will be more deals.
! c0 Z6 F% M I& C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ T {6 Y u9 M5 o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 R6 ~. C* c1 d0 m5 o& D I5 b
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ q% L4 M9 Y; Y6 G3 dbankruptcy, they already have debt financing in place.. b) s7 ~! o. }: h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! C7 O" V( D, z6 ]2 O- Q
today.# {( `$ C9 a1 `6 u* m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) D8 }' S" A2 m
emerging markets have no problem with funding. |
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