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发表于 2011-9-17 13:16
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Current situation: `: U! H g; P. q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" h6 l7 o; ^) ?
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; M4 t& }& u9 @
impose liquidation values.
9 [ i2 u: s; ]" g( O. F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( t, t8 O: [6 W. ^! oAugust, we said a credit shutdown was unlikely – we continue to hold that view.% S* W0 V" p f8 u& i6 \. Z. N4 i
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 T% m; f6 J: I# E |2 M/ `# l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) u9 W1 `7 L; ]
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A look at credit markets
# t) C" x8 ^9 m2 T, ]+ Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) k# C- \0 S; a0 k D
September. Non-financial investment grade is the new safe haven.% a1 i0 f% i4 c% Z5 @: v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ t# o& @3 i% j9 G: r
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 S2 I5 R; V4 b/ _3 f* h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 ~1 t' ]. K, p) t8 ~; paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* o9 s; x8 f) z( J' d Z( _$ \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- \$ Z. \4 d/ ^& Jpositive for the year-do-date, including high yield.
* h7 I6 {; m. o) A Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' w7 L6 G( \# k9 ^- E1 N4 W8 o
finding financing.: w) j* R( V' }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 O1 y) z, ], @" ^
were subsequently repriced and placed. In the fall, there will be more deals.7 p5 o' E+ D4 T" j; ^3 S- O
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( d: z1 E( s. X' G% K" j lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( k: Z0 w1 p. o9 Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 D3 ]) |* H/ ~
bankruptcy, they already have debt financing in place.
( R1 s+ f7 ]. D/ a+ v$ }% I1 |' P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ H4 |. ^0 r7 d9 V# m1 K
today.
' A4 F6 W$ x* ~, c/ b9 b9 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 x# Y9 L5 a, d/ k' w
emerging markets have no problem with funding. |
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