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发表于 2011-9-17 13:16
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Current situation4 a6 k7 O! J3 |8 L0 f# a
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) v, F- n( Z, t( I. T r9 yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. B) a) K' D* g2 u' K: U
impose liquidation values.. l6 J4 P u6 k F1 C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 N) [* X) x7 F3 g, I# ?
August, we said a credit shutdown was unlikely – we continue to hold that view.& C3 I, Y* @* |0 U7 y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; t2 G) P- r8 g; ]scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets1 ?' C4 r+ d( ?% B, O: G
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# N3 V" j' f3 i, D/ NSeptember. Non-financial investment grade is the new safe haven.
0 { Y+ F, C: X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 V& }: X( I* A* M9 o, w* Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 Q& ~2 h3 S4 H% X) T- Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- l* C1 h, w; H2 l+ [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# e! A ^& O- h( D8 ]
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' v$ j' l) P0 Z0 a% S. C2 _positive for the year-do-date, including high yield.
/ B( p0 `, Z; Y, }0 j7 `0 F; H# f Mortgages – There is no funding for new construction, but existing quality properties are having no trouble l9 j5 o9 z' V/ I
finding financing.
2 W& b% R, Z, f- l. _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- U/ j( f ^- Uwere subsequently repriced and placed. In the fall, there will be more deals.
6 y2 D- g( j" `# c* e* J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( L7 P/ k& f7 G- M* Q2 u" v8 Wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' V( [; w4 w" b, _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 K4 A4 i+ x6 q5 G5 Zbankruptcy, they already have debt financing in place.
4 C1 p" h+ T; J- }' q; ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( b9 o, W) x% H! H& c
today.
3 i: S2 Q+ O" }6 d Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 s2 X- C! w$ T9 s
emerging markets have no problem with funding. |
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