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发表于 2011-9-17 13:16
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Current situation) b5 L# f5 p3 Q4 o
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' {* I' g) k+ w( Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 R8 j5 P. b c8 T3 e. @1 B" ]: b3 Cimpose liquidation values.
- z- ?" M3 c1 {. ?/ A# m5 k9 ~" D" g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ o9 ]) b, X' \ l: I+ _
August, we said a credit shutdown was unlikely – we continue to hold that view.
! E3 ` A* \' j* ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 M# Q6 b Y/ r8 B1 P' q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: ]9 Q8 X* q* ?, k
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A look at credit markets7 b/ b$ L+ o3 y9 k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* l+ ?+ T8 U% V, ? D
September. Non-financial investment grade is the new safe haven.
X3 E* V( M4 m8 [8 \" a High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ s$ k3 q( t% E# c: y7 [
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ R u' k! O7 |. Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: a( R E' H$ H6 Z7 i6 k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 |8 j r' F& a z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; N: Q: i) y0 k8 \9 D: r8 ^" Z
positive for the year-do-date, including high yield.
% Y, H% l4 X* K' v3 T Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 Q' G. j# w1 q, I& |. |finding financing.; z }0 s1 K& f6 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! V+ k" t/ N* S6 V- n3 U, H7 e5 h
were subsequently repriced and placed. In the fall, there will be more deals.
9 B" n( ?& ~+ P( R: _* X0 L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# v; H7 [$ N4 w+ C" K9 I8 b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 n3 f- U' G2 K# o4 A3 H C8 e/ agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 [2 s R b" ^9 d! O" a
bankruptcy, they already have debt financing in place.
( s0 B, [& [; ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain w: r) X1 j1 }1 [ i8 b8 ?. L' s
today.
4 G+ M# ?+ P5 g: r0 D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 s. K( t* `( b0 v
emerging markets have no problem with funding. |
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