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发表于 2011-9-17 13:16
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Current situation7 m' e: o+ r% M" {* ~5 [: C0 H. h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ S- k" X5 @1 c3 x8 C. Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& i2 l; o1 k; r4 [. Timpose liquidation values.
+ l7 D2 I( p& r0 l+ H In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ n' H$ q7 w" e& q5 @; T: kAugust, we said a credit shutdown was unlikely – we continue to hold that view.
; ?# T' C' u" g6 g6 v3 T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& ]2 r I+ Y5 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 V( f0 [; H7 d" y
$ ?- z# K# {- h6 vA look at credit markets
+ F) n2 t3 _2 n Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 D8 f* L _, G' T/ x0 a7 O" B
September. Non-financial investment grade is the new safe haven.
: Y( Y1 |' @$ F' Y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 W& ?& v& F# Y) ^- a. O, t8 D- ?then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& }3 k9 g" q# ?$ j k# c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& \5 H1 q0 B' raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" P$ u7 T1 {- N* q# }CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 K( o b( p: X& fpositive for the year-do-date, including high yield.
+ ^9 H l2 U4 Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 i! Z9 Z7 T! B5 Z3 vfinding financing.7 ]5 N, P5 @) f. Z N0 V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 ~7 h- H8 N2 u; B$ I( ^
were subsequently repriced and placed. In the fall, there will be more deals.$ h& o7 F; }' M. s/ h8 }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 \# `) b4 v. A7 N% U
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* w8 O* Z6 W& d; F% @1 T8 D4 igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& S8 M$ n6 [+ }6 f' P, E
bankruptcy, they already have debt financing in place.3 r; @" Z+ i! h* |* O; a; E1 p
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 h; y: _3 {) i% ?
today.
) d7 T- U2 V4 {2 [ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ M0 z! q% |/ Y2 p
emerging markets have no problem with funding. |
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