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发表于 2011-9-17 13:16
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Current situation$ `' ~" M$ t) X# Q* ~& D
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ x V) p4 o( e, Y0 ] a8 N; |as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' E& p) p w" w) |+ N
impose liquidation values.) q n) x ?; c- f
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 d! ?/ C; W o/ `
August, we said a credit shutdown was unlikely – we continue to hold that view.6 G4 W+ J! R# A8 u
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 {8 c+ y, y, [ ^5 y5 `
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; ^. x2 p* ~8 S# q% }4 ^! T. R
% K3 C7 a, j; F, hA look at credit markets% t) `( y! {6 K( I6 _& L- @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* w9 j- c7 a: A) r3 W; y7 rSeptember. Non-financial investment grade is the new safe haven.4 f/ W, m" `) X) k0 T( a" G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" Y# b z5 [% q9 K' r+ ]: O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" n6 S/ X6 l8 X4 a
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 M# U. K7 R7 P1 T7 a, ? ?5 k6 ]* ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 s8 M8 R5 I0 a4 x3 P) hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 |+ i, H# C$ F# n5 @positive for the year-do-date, including high yield.) m6 o( S, q% i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( \& F+ X5 f8 ]$ @* x/ w5 U, k2 W
finding financing.
5 e! w. {6 Y" E$ I* G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 ^0 X+ i' w0 C) ~7 g$ A8 d' C' m
were subsequently repriced and placed. In the fall, there will be more deals.
( n1 n: D! y: T. V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" V2 _" s% o! N$ J9 o7 His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ R* e' n- N4 F3 ^$ U6 A) {1 z8 Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, V) a& W5 |# A
bankruptcy, they already have debt financing in place.
9 M+ c* j/ k- C! X5 g2 @$ ^8 G, n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- f+ c9 a+ ~2 t8 Ttoday.
1 K( H4 W2 l) T: J$ I3 w Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ O8 j5 Z+ X* n* Y: ~% L, hemerging markets have no problem with funding. |
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