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发表于 2011-9-17 13:16
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Current situation& m/ f! m2 h+ I9 K0 q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# g- ^6 L7 }. F4 ?: vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 ?1 R4 U' L9 G% V. u' C6 m
impose liquidation values.
+ T0 d. ]% d9 w5 n# E9 ^. y4 V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; g- L: P8 \( U3 E& e
August, we said a credit shutdown was unlikely – we continue to hold that view." O$ @! w5 V( q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 w! d. ]3 H7 y' D0 { Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 w8 ~* T; R. W9 l
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A look at credit markets" Q+ Y. K6 n* o8 |' U: r. m9 b4 `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* t7 g2 L( z3 V2 d% c( bSeptember. Non-financial investment grade is the new safe haven.6 f- p' l6 G. H5 R9 b+ w0 v2 a% ^
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 L/ h0 `% o% x# D8 athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 _& r+ R: ~% Q) g; A" F' ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) \# p* z/ ^2 |3 a' b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ i7 ?0 A/ F4 G: k) R
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' i# [# G0 D; B2 i4 ~& x0 V
positive for the year-do-date, including high yield.7 O& I/ J Y6 K$ ?# Z0 S0 y% d! o
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 G$ C ]1 f7 s2 v
finding financing. x+ Q- g g5 I% j6 L0 e7 k
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ }& S5 G3 k4 E* [
were subsequently repriced and placed. In the fall, there will be more deals.
% P& t9 G/ F( R7 G) Z |, C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! s6 p/ V: w# w; pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& ?# g! q! o' {0 e" w' X3 C' ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ s( C1 G N: Q5 l9 S; K( ~* p, O
bankruptcy, they already have debt financing in place.$ M" W1 V: V4 s" k; ^9 X. t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 K- r8 ~8 S; y0 `$ [7 g9 ~today.' O; F5 }9 _7 g0 X; S$ n
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% t6 k8 d$ w' S% pemerging markets have no problem with funding. |
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