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发表于 2011-9-17 13:16
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Current situation9 X2 K. \7 c5 x6 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! n0 A4 H6 j5 H2 I! Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ e4 q5 _$ Y% k. B3 S$ Kimpose liquidation values.: {6 U8 R7 O9 |1 P$ z* B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% \0 p5 Z$ x2 D" F3 p- E! X
August, we said a credit shutdown was unlikely – we continue to hold that view.* @ R8 f G: U6 ]3 G/ \& @' d
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- Y$ F( J0 }5 X8 {: Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- h) u) [* y' u2 r% m+ DA look at credit markets& H5 C3 _3 _3 b6 ~% p) o- V
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 S C6 ?, X0 y2 R( fSeptember. Non-financial investment grade is the new safe haven. g: c3 [ j& Q, k& ]
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 }/ g/ J7 P; T& ?8 p9 \then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, H' T" A. y8 ^4 ^2 O u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 |* H* o/ ^, C- S+ haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% n4 L5 W8 u2 Q x8 M5 n$ d g
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 i1 s( }! P! U; s
positive for the year-do-date, including high yield.
# Z/ k( a, W" K Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& O+ E; q% k" m
finding financing.2 |0 ~3 s- i2 Q8 c1 F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they* J* ^# z1 G) n& u) w! c3 Z
were subsequently repriced and placed. In the fall, there will be more deals.; V* @# G* d) v
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! y4 ], i/ a0 `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ N3 p9 v1 k+ T- c
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. W/ p: A4 m( U4 u7 ^bankruptcy, they already have debt financing in place.: |6 O2 z2 i# R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) `3 W& \" i' E* D/ d ]today.% r1 `3 T) u i9 t' D- ?# J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 {4 P9 k; w$ R. y# Z# I: Remerging markets have no problem with funding. |
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