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发表于 2011-9-17 13:16
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Current situation- e7 |8 `% b4 e4 J" O6 J. h" N1 Q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 e# [+ Y. z" ]( Vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 l; T9 E# K: n- y* k
impose liquidation values.
8 Z( R! i9 M. O In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 F& c2 ^ c9 |6 D: v, W# o6 D. OAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ Y/ X* E% g* h% g5 M The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 ?0 D$ j3 {. e8 t8 N
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 a( l) G2 V2 F! @! A0 i+ MA look at credit markets$ E, z K' P0 `) i) U! g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ O4 r$ ]% Z0 K5 E* D- d+ S+ M5 }
September. Non-financial investment grade is the new safe haven.8 A8 U9 ^" H9 b$ S+ E
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' H2 {* ^9 d( r( A7 k4 }+ k othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* `/ c8 E6 y/ H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( K- a& ^7 ~- G* K* ^2 maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; _4 E% x5 n# W- y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 u3 K3 Z- c* s8 t4 a% j( J# W7 x6 Cpositive for the year-do-date, including high yield.% O& W2 V( t i+ J( U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ T8 m9 i' p2 d! [/ H I" |finding financing.- K( Y" B* g8 c1 G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ t# o4 ?5 [8 U0 bwere subsequently repriced and placed. In the fall, there will be more deals.6 `9 C+ a, c" P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and F4 d+ z5 V9 I7 x7 w7 h7 \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# l- Y- q6 _' O' A7 R; R
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! I: H3 x. B+ pbankruptcy, they already have debt financing in place./ ~3 p( N( e! I" M. b9 b
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 H, m& o/ T, s z: Xtoday.! B. B* f: R3 f8 Y/ q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, e! T; a+ ?6 ^2 t+ _$ i& |
emerging markets have no problem with funding. |
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