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发表于 2011-9-17 13:16
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Current situation& J9 L/ Q+ g( |1 q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( o: |/ X! y, o8 X; i$ f
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, n9 E/ k, r( C% F" Eimpose liquidation values.
3 r) @4 M$ y% ^1 B0 o% M In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# i" |% O- t/ Q* Z; d+ {3 r: pAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" w( G+ p" o i* T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 y. v6 v2 w3 v! Fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
: ?% r, D. d- l/ h4 p7 G5 }' Z% }2 D; B
A look at credit markets' X( T8 |7 _' h* r' D! E8 `: m
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, {4 u+ A9 B8 X5 OSeptember. Non-financial investment grade is the new safe haven.0 @+ o, `" y* j
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 M' M- \: I5 y3 j: Ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, A+ q* ^7 D* d% l m/ E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 X0 P. L8 j+ U7 `1 Saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 \+ i( j5 K" e1 _/ d5 Y" @CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
m2 m, F( U8 L- |5 t4 i" ^( E3 ypositive for the year-do-date, including high yield.
1 G/ C" [$ ?: h) F2 C9 y, ^ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# r% U! Y- K, f8 [finding financing.0 K! O8 S4 o' ?9 d) [. K( e% J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ e3 e' G. S5 Y4 Zwere subsequently repriced and placed. In the fall, there will be more deals." |/ R" U! d6 N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* c% H# w" a, Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& h5 \! _* J7 @& y7 y# i$ \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 r5 a2 F! E) V' j, x
bankruptcy, they already have debt financing in place.
) `) ~- P1 e; ^5 _2 ]" o( H% B. g H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* \3 J1 L2 H* _today.
. L1 a+ i$ u5 k9 ]% T$ T4 d( Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 Y% ] s2 |% A& f! L) c
emerging markets have no problem with funding. |
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