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发表于 2011-9-17 13:16
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Current situation! S" R* X( ]0 B9 `
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 m7 m1 @4 P1 q l9 i% ?, has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may j7 l: Y* W/ ~6 P- ^6 e# G- R( x6 x
impose liquidation values.9 I. I& _2 @, e5 S: T" K9 d0 i
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, Y6 y @, e) z5 J0 G
August, we said a credit shutdown was unlikely – we continue to hold that view.: J8 ]% |& t: ^7 g3 N$ b
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 G( [ ?( C' G( v* y6 f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 ]0 H9 B9 Q6 R! q6 h
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A look at credit markets# {9 M- T5 r- S% n
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" y2 M: N4 ^1 y; u) M! \5 VSeptember. Non-financial investment grade is the new safe haven.; j0 B8 X( v- s* J$ n2 x- I+ {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. } C" O. m U1 p" r$ n
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. }; t$ S/ I9 b7 e* p; Ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ C/ Z; C1 p* O' \1 C6 @1 N
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! F' _0 ]( O9 A, v% [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ _% l; [$ D: H; z
positive for the year-do-date, including high yield.' ?* M- w5 |) p* g7 s2 W" L
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 D& D5 F8 K& F' a
finding financing.# Y7 y* a3 `# x( M7 D' T
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) i! i6 ^. g. h. {were subsequently repriced and placed. In the fall, there will be more deals.
7 N. Z1 k4 w, B; u- x" c# z2 Z5 v3 G9 y5 G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ N8 b( M, p- D, xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# s4 W) X& y2 `3 i$ I( C3 K. _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' G- i, X- ~% E) O. V+ \5 Z: Ebankruptcy, they already have debt financing in place.
8 V. E) I( j! e8 q6 T) t5 i# |4 A European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% f- I( f0 R2 p5 f( ^) P2 B6 otoday.& E( e3 }+ j3 }
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ F" E( Q' G5 o4 h& e5 Lemerging markets have no problem with funding. |
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