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发表于 2011-9-17 13:16
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Current situation# d9 f* c8 d5 u* s
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! y4 k) v+ O6 C' j, uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 P6 ]4 M3 B$ ~5 J
impose liquidation values.& s9 p; ]4 D5 S. h" `: L/ h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. X- D u/ a/ o+ B. \August, we said a credit shutdown was unlikely – we continue to hold that view.
6 O6 c4 P" T% ~+ D. ^' Y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ s3 p. u: D2 Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. X- |3 b0 L& b- U# C
4 }+ j* s. F2 Z: T* UA look at credit markets+ J8 ]7 Y: S: l' X( B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% b, T' |$ ?- K6 d) y" {September. Non-financial investment grade is the new safe haven.& |# J9 i/ k: g5 z+ ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 N8 V- V, c0 |. [! Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" `- ~" w0 o8 H& y" O, c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- m% \" G6 K7 y/ Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 s* B1 S* u9 a1 [5 F* ^% A4 x3 f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 `( L/ k, L2 ]4 q2 ~4 _4 G4 q3 X Opositive for the year-do-date, including high yield.9 C; ~' z6 z y. H9 t5 ^! J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 Q" L! T& F v2 Z5 d7 d
finding financing.
7 d. p' D; d7 r; }2 h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: n% g9 h Y5 B: V' p& bwere subsequently repriced and placed. In the fall, there will be more deals.# H7 U8 {6 ^. `3 ]# S6 o
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 {- J1 M% S' ?5 v& X0 {$ D
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 Z2 [. i8 ~( x7 _% s7 S m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ n4 S% f0 ~' f9 ^# G" I9 M- Wbankruptcy, they already have debt financing in place.
6 i( Q3 _8 v8 U( V8 c5 n3 D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain A# h4 G/ D0 [% Z$ r
today.# |: r' Z3 J' t2 ~/ } M0 d& S! j* s& f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 t# X! d0 `8 wemerging markets have no problem with funding. |
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