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发表于 2011-9-17 13:16
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Current situation) @2 A, P& M; O. M# u+ E0 i! Z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 r. K( z1 a% c. V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: e8 k" Y9 \6 \6 w5 z! G
impose liquidation values.6 Q9 ^/ d/ V6 d9 p! I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* ?+ e# W9 p- Q7 v8 UAugust, we said a credit shutdown was unlikely – we continue to hold that view.
9 e* m, t0 I, d7 H5 i4 p! `' V/ J The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, G' j8 U, |- J; \8 |scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets4 r& g, |, U8 y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; F& y. L8 P5 V. F
September. Non-financial investment grade is the new safe haven.7 @) V' x) F+ A, |" |, ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 ` H. B9 x7 L6 t2 wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 Z4 x" Y: A" b- x" I, ?0 [9 o8 r7 Ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% P" o5 E- e4 H- a gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ V, H3 u" x& y9 S. b5 d8 w5 [CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( x! n1 s% Z, _' @4 f8 {positive for the year-do-date, including high yield.
8 i L, K, ^+ |' o! T Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( h" u3 \6 A* Q6 [# m% B6 i6 q: G6 v2 B
finding financing.
, ~% |/ n7 Y A# Y9 `# l& F Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 s3 W8 }' S* Y7 t! k/ i$ _
were subsequently repriced and placed. In the fall, there will be more deals.
4 T, g# d: v( M( m a# M$ ^ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% Z& {- l2 O1 Q/ ^$ ?
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' V y- p+ i/ tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; Z) s/ T( Q+ S, x
bankruptcy, they already have debt financing in place.
1 F# S$ m: v% ~+ P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) e8 f* p: b3 ]. D% {today.( `; L/ ]0 g! N& p6 A' E
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 N# D+ ] N) B6 p! v# e
emerging markets have no problem with funding. |
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