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发表于 2011-9-17 13:16
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Current situation" F: r' z- S3 L' l1 q% o5 n
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 N- G6 Y% m) oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 n# z1 o- @. P) l
impose liquidation values.
) J/ w* I7 O; v2 T2 p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In q0 Q; ]6 H+ A( ^
August, we said a credit shutdown was unlikely – we continue to hold that view.. A: e) |, S2 ~7 z' g: o- H. p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- p2 d. q# B: ~$ b) ~: @0 h" cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- J3 a& B b4 I# @" o. y7 F6 L
; q: X ^- ?$ U+ B/ BA look at credit markets
) a' V9 d' k m/ h- y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* o* _( d: t; _* E$ u
September. Non-financial investment grade is the new safe haven.
8 |9 k8 X: y4 R, {' }. V+ m, Y0 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" w- P1 r+ n3 t, S W6 D. o5 M
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: `# Y- b( v' V+ U7 p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 N8 r3 a. x- V! Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- z4 q. i ~( I! H+ ]% M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- K' E( w# I' `4 w7 r* l# @; }
positive for the year-do-date, including high yield.0 k E) \) w( ]9 G L
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; W- f+ [2 E- S. T1 b
finding financing. r, T2 k8 q+ R9 c0 P$ _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' i' {7 a, d* t; i# k* B5 P
were subsequently repriced and placed. In the fall, there will be more deals.
% C1 X, p; M2 e7 c Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 D Y5 d! x$ |, i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: h# p9 s) g5 B e. `( G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 y. k/ r' }: s; U% Lbankruptcy, they already have debt financing in place.
. J) _" i. ^2 c! ~$ k4 ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' }& M' s3 M8 d* l3 Z3 l
today.$ Q a5 H. Q! E7 q" b
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 K: Z# t9 C! x$ ^, u# D* Y
emerging markets have no problem with funding. |
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