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发表于 2011-9-17 13:16
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Current situation1 q: j, q0 e( ?- M9 W* M3 l
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* k' V6 k) X: m5 {9 A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 J0 \4 ]% |' r
impose liquidation values.3 N- [' x- Y: I4 I; @" T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# H# [ K1 V5 H. [0 m N8 A9 dAugust, we said a credit shutdown was unlikely – we continue to hold that view.: o! r9 j2 {$ Q3 ^* m5 K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 r( ?! b W* m6 P8 C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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6 i$ _" v$ M8 }4 v; O0 G4 A6 tA look at credit markets, j% h; u% s% S( \! O8 o7 r( A0 ^
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& x+ {- g) j- c" jSeptember. Non-financial investment grade is the new safe haven.
4 h B6 {, [! b9 |5 U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 [2 l: j' q3 E1 l5 m) u; {then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! g j! o, X4 S1 ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 ^$ S m: O' A( _- n- n3 Q7 Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& t4 Z* C; z, ~, S( V# S5 M9 l; M
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 U$ S) q1 C5 u: y
positive for the year-do-date, including high yield.# u( m4 X, |3 N! ], A- S- U( N
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( W! Y* I1 \0 ]5 F" k. Jfinding financing.( R$ S! Y' m9 q- Q& }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( w4 Z! r! L5 E G' @were subsequently repriced and placed. In the fall, there will be more deals.
" C- d _& d, b% \2 u% ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' l+ l, W; r0 ]' t+ s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 i( R, \# e5 m6 u( I
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, g) Q! _8 z3 H. O! d; e9 a
bankruptcy, they already have debt financing in place.
. q; w% F2 R5 K& A) ]0 q4 C- M1 q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 G/ L4 e0 x/ a6 _
today.
9 r, c, K; _ X0 s/ B2 R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 ~( B+ m2 c! ?! @7 E! U1 @
emerging markets have no problem with funding. |
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