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发表于 2011-9-17 13:16
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Current situation; w: E) N# L& Q' g" b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; R6 a) n, ~3 k' d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& h N/ i' @" m5 F
impose liquidation values.3 W0 g5 N" l/ l7 o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. O; T* A3 F5 o8 g' V
August, we said a credit shutdown was unlikely – we continue to hold that view.
2 E2 g/ `; v2 H* x+ [) r8 g, n The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 j$ S- Q/ W# x4 uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& S$ h, Q! L# U9 e% P4 z
" P X$ c' E5 l. PA look at credit markets6 q+ {% Q/ k* ?
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# s; X: {$ G9 o6 V% n kSeptember. Non-financial investment grade is the new safe haven.- _% r/ j" M+ V# H2 | {2 M6 I
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! O, ]( F% a1 p4 K6 mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 Q+ S+ Y1 w; C0 }5 T+ K
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have6 I- N% P5 W" F% y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ P9 ?* U7 I S
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! u( B6 | s) E! D v
positive for the year-do-date, including high yield.* G, b9 E3 h% Q2 B) E; T( c0 U( A
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# B" Q2 m. \) x( g% t
finding financing.
% @$ d* H( V. S Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% Y$ C) k9 u& N- F' g/ ?
were subsequently repriced and placed. In the fall, there will be more deals.
% U! S/ l( @) I Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 L% n. }: M6 H9 t! }+ Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( V; b, ]6 b. Z% d; Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, H7 S) z+ @* ]! Ubankruptcy, they already have debt financing in place.
; Y3 d+ k) @# }1 B* G+ v European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' l2 u3 {$ M9 ]! [+ \today.: Y' F) `, o+ `/ q' m2 i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 Q0 E4 c( O& G4 D# y' a( hemerging markets have no problem with funding. |
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