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发表于 2011-9-17 13:16
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Current situation! y1 _- E- A/ E% ~0 x% W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 x0 Q9 U" \' M! }# V- \6 H
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. U% g C9 A P9 d4 `7 g) Yimpose liquidation values.; B8 L3 R! O! v& ~5 I8 J1 a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 W, H* b4 l3 @8 ] l6 R0 }9 {August, we said a credit shutdown was unlikely – we continue to hold that view.
- ?! }0 l. e5 b8 W5 ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% x* ]) ^9 Z2 }& o/ E% k0 kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ L. C/ c! g7 j* c- H5 n- H# @8 D3 @9 i
A look at credit markets2 Y4 @" f) L, w# n+ A
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 m* y/ W; K6 i" k/ ?# jSeptember. Non-financial investment grade is the new safe haven.- e2 B" X+ [5 j' `6 K0 d7 D7 e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 b: C" B) [5 b' S: M& l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! X8 V4 r# m( h- z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 z5 e) q+ c8 P k! ]" F5 X
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 }! E. D* u$ [# g% N# J3 kCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' T2 b6 u0 y- u ?+ u! Opositive for the year-do-date, including high yield.1 E Y% A3 t+ _% J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, y; T3 p( C6 W' a& {' Bfinding financing.
, N/ L! U2 r7 |4 g Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 W, \( ?: O' V: w- H) z& ~& awere subsequently repriced and placed. In the fall, there will be more deals.
" ]4 R& C) T1 j8 t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
U& X* \5 Z+ Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ W, o7 D3 \% \ y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 N! p8 o- ~1 u k2 r- Ebankruptcy, they already have debt financing in place.
" W/ j( G6 M4 l b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 q0 ^1 K) ]" L% e b# Ltoday.
' g. r0 g3 y. w* |, ] Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, o: J' |7 w9 u# _6 o
emerging markets have no problem with funding. |
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