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发表于 2011-9-17 13:16
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Current situation9 `7 |9 F5 y! N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( Q6 n! ]* e) {$ B) \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% K* V: \# V8 Oimpose liquidation values.
, O: M7 T7 P' M7 O In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
W- ^7 E9 |7 L; W# W& mAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ f( r: @6 |7 \& ^: b# F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, G2 C4 o1 E5 y3 k6 {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 l- |5 G2 p2 aA look at credit markets
& h$ v2 s/ ?1 { Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! {! o. I4 ]! _* b8 i- o
September. Non-financial investment grade is the new safe haven.
9 _) W- `. s( p- c. L' D" y1 C High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 \3 \; e* i( \1 bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 M* }) R9 p" l, g% b6 m, F! x% E+ J: J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# t( m& l9 |" k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' {. X5 v- L. x* k+ e& q0 Y! Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are V) Y1 z2 d( ~- \ H
positive for the year-do-date, including high yield.* P# k# ?# N5 h/ f) {. R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ F2 E" I+ c; B3 M* s
finding financing.
. ?1 F, W' h3 s; D( D, [ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( Z) D( \: s; X( r7 ^; P0 L# n
were subsequently repriced and placed. In the fall, there will be more deals.& o+ y% Q& I" f, C, T
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- I, f6 Z* D6 c7 M# }" Z# H
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 V3 f m, o* C% U: `, ]8 egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 z) ]# w5 l! X' R3 \) t: L* p
bankruptcy, they already have debt financing in place.5 r a* J: ?7 `% P; v' n4 w8 Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 e1 V) v" h0 A# B- d9 eemerging markets have no problem with funding. |
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