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发表于 2011-9-17 13:16
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Current situation7 l& F* e/ Y4 P+ a2 i" L
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ ^1 U: n# y* J" A2 M9 U, o$ u# aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) O% a1 Y2 M4 k4 |# Y/ n/ P" [* Z% simpose liquidation values.: v$ j- z2 u* F4 F3 M: t- L
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* L K @2 `; D% x
August, we said a credit shutdown was unlikely – we continue to hold that view.
$ E8 {4 z2 w8 B The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 F, |9 l9 Q& r0 e
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets6 g/ o, A/ `5 f3 S2 y! [3 B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; |! o6 C( [$ v. M/ a& E
September. Non-financial investment grade is the new safe haven.
; d9 q$ y! i* O, j# P' p: A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, d& {! J: b/ ?( u9 m. g& i
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( @; B# W+ ^8 {8 g. ]8 h$ P9 Kbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 e& W7 A& U+ _3 O$ k% Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 ~& ]- f5 O6 {/ S. F( FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) f J0 H, L3 R; W0 |* H( ~positive for the year-do-date, including high yield.
5 D+ o0 y: V) w6 r. ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. w7 d1 c; V/ o% \finding financing.
* {: ^& {; M0 g( v- I7 _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ l5 Q6 }" T0 [2 M# q2 Q# uwere subsequently repriced and placed. In the fall, there will be more deals.
$ P% @" z4 L. r% g5 v3 B' v, e, h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. I5 r: e+ y+ C1 a: }& Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were4 _2 v2 t, D5 E+ O# ?
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 I7 P: ]8 h7 X/ m( Z% o1 B
bankruptcy, they already have debt financing in place.% R& R6 ]7 T% w
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ U' l- H. a" {+ B' k1 j2 D6 G3 `0 B
today.3 s1 b# f @' E/ F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) e5 b5 P$ r# h* N0 K* T! M" zemerging markets have no problem with funding. |
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