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发表于 2011-9-17 13:16
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Current situation& b0 s1 d( J3 c7 D. [! q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long! ~% e1 @- [- r. v7 n
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 f' O ~. e7 q9 M
impose liquidation values.
; F$ n- B* A5 A& A: z In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 X( A0 d0 t g2 b6 x" g
August, we said a credit shutdown was unlikely – we continue to hold that view.
( T S$ N7 x' ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 u4 x( o8 l' o( ~) |- ]/ B
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 C$ l/ _2 e9 U
( p; ]9 E1 B b( V5 e. B) H
A look at credit markets
3 b+ e( |3 e7 R3 _6 W' a: ^( l2 o Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: z* D: a- }, Y* C6 j( KSeptember. Non-financial investment grade is the new safe haven.: O' T5 V B- X9 V% X
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- } O6 K2 ]0 w2 i
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. T$ W7 A0 ^! r( }; Kbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! }& Z2 ?9 |; R p$ A" F/ c" {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& {; T, |* z% I+ c, |! R7 eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# T$ G; w% G [5 ^9 K' dpositive for the year-do-date, including high yield.
& {* q5 M: @. I0 i Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% X* ^3 X1 l7 v* nfinding financing.
4 p# N% b7 Y0 H$ r- J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ s3 m8 l# O* w8 j, k/ {were subsequently repriced and placed. In the fall, there will be more deals.
( |( r; c" Q" \3 w, h* W' O$ P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ a3 A1 e2 u+ O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. F, ]4 @' H, P; X2 q7 m' K- zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; G7 a( M5 S4 L: I7 [$ wbankruptcy, they already have debt financing in place.; W$ P1 H3 K2 U" }* m8 k2 Z2 |4 k1 U
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: M' S$ |" {' ~& ?1 t
today.
, n% }) Y0 w2 o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) {7 e# R8 i5 W' i0 o+ m5 w& temerging markets have no problem with funding. |
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