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发表于 2011-9-17 13:16
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Current situation
2 x& a% r3 Q1 j4 H5 Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ d3 a0 a) d6 N& V9 ]; u) k$ X
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 o/ n' M% Z1 l- Q: V; F' |2 }
impose liquidation values.
' B1 d' ^' b7 P% \8 V3 Z" m6 z' u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! k5 z; T7 W; g( z) BAugust, we said a credit shutdown was unlikely – we continue to hold that view., T% l! U" S/ h9 ^$ v, B, H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 d. k; Z9 K i( I2 ^" C& F
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 f9 t6 R' m" f& g$ N2 e
7 W& W$ s+ i$ z, K* W5 c
A look at credit markets; v3 I3 A7 q8 g% K) x2 Q
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 k8 k4 y& r5 P/ ]& [. v
September. Non-financial investment grade is the new safe haven.8 p8 d7 O- Y, Z0 f$ B" W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 U K5 q& B kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! Z/ o; v O9 K$ W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 q) ^' X. b# n3 S& Gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- X% i& C1 o5 k' QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 b; F$ s" `/ W9 w# V9 Y' @4 K1 W
positive for the year-do-date, including high yield.( d+ N+ q# x3 }+ |1 I# E6 D: M9 y" B
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; q) Y* s4 M, t: I2 h. C! R
finding financing.
- B$ m$ } C8 G3 I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! [) w$ `6 A9 q3 z8 a
were subsequently repriced and placed. In the fall, there will be more deals.1 c1 X! l1 f; \8 L' ~' `7 i- e7 Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 q- Q" r8 C& z! e7 i* _is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were v/ G6 |) z0 P% D; _6 h/ X( _" T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- M, d% _( u0 q7 Z( r! ?7 Gbankruptcy, they already have debt financing in place.
- X$ O1 |! E, q& k European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" n+ ^. R$ g0 {% e* U
today., L6 H- x4 n; Z( M% C
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ x* r6 F R5 ~: |: v" Eemerging markets have no problem with funding. |
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