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发表于 2011-9-17 13:16
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Current situation
% ?9 G. j& w8 S' V) X9 V5 @ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. s+ ?- O3 ~/ ?; k" cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( a- L/ S( d( w( p# C
impose liquidation values.: K/ n" O6 v; ?; w1 \9 Y# u6 y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 U# j! \. q1 cAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 b ]3 s: U6 f
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 q9 T5 N8 G2 v# kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) b) d5 r$ D2 q- pA look at credit markets0 N5 E. a2 o: ?9 p! {4 x
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 n* ~4 p! R1 q- F9 CSeptember. Non-financial investment grade is the new safe haven.
) _" ?0 }1 k3 m; Z$ T$ X9 _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
a! j, o$ I7 P9 t0 D7 Y; v6 H' rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( K7 `) c# b9 s/ }& `
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" y' b4 x7 I8 T+ G( h$ p5 r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' A# \2 G# l' F. ]: x; v/ l* LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 U% z4 }& X& Z5 V& d' |6 M; q
positive for the year-do-date, including high yield. R5 \/ `% x: q8 M3 Q @0 {
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 C6 ^$ t3 [! L0 T) _
finding financing.
" a. d7 {! l: R5 C- `3 F Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ i& X% C8 X% g) _were subsequently repriced and placed. In the fall, there will be more deals.+ ~9 O& _. X' f5 p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' N7 C! M: `+ uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ w0 d5 G9 J* i6 n# ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. L0 T% j5 S9 B: e2 x0 qbankruptcy, they already have debt financing in place.* l7 | t7 I( H4 I: g* Q7 Q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% Y! r1 t& q, q: E8 i( stoday.
: O Q5 }: d6 r9 e0 K, f% \2 U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 M0 P! A e+ I: |# l7 p& lemerging markets have no problem with funding. |
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