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发表于 2011-9-17 13:16
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Current situation" I0 p0 |& u- s
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 X$ ?2 I$ I6 ^* E2 x
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# }$ J3 d& l( x( I
impose liquidation values.
. |) A: V ^" n7 b& ]9 n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; s1 D2 h3 Q/ K; w: O8 V7 fAugust, we said a credit shutdown was unlikely – we continue to hold that view.4 [/ _( s q6 i+ p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 V; Y% Y! p2 g4 X, L: P
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. u( b7 f) d8 `' N, u2 {
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A look at credit markets$ q: V: Y# g5 `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% F% Y; |6 R3 f& G. ]
September. Non-financial investment grade is the new safe haven.
) B* f: `0 ~& {8 Q2 ^( ^ I High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' s3 z( M$ ^3 S* C: O: Z- `
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 s5 ^; B3 @/ |3 Qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 z A. f4 c. L$ s0 N; y+ iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 P$ m7 p5 k( {6 ?
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 w6 |& e7 Y. |9 @6 g( j! ?. Wpositive for the year-do-date, including high yield.
6 g N1 a* B# E$ m Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 x6 n6 n9 j* y# Q% S) xfinding financing.' r7 I1 q; I) N. b
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; q3 x/ M9 y) E
were subsequently repriced and placed. In the fall, there will be more deals.& |& }" h3 Z, ?2 |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ m& h6 E$ I! ^1 n( l, e
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* k& a4 w2 H4 V6 S4 n1 N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" I; Y+ m9 E- G# ? Tbankruptcy, they already have debt financing in place.
& \- E. A2 n# n, E3 G$ n+ U9 j European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 w( i1 w" i* p( N1 c' J" p9 Q8 I0 ctoday.0 w3 i. H5 S! I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( ]/ r9 D0 ^7 U9 I" Hemerging markets have no problem with funding. |
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