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发表于 2011-9-17 13:16
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Current situation. ]6 {% i5 O) t( }7 e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 u9 C# A0 A9 r' G7 I4 G+ s' |! I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may i3 D. ?8 d5 B: a) E; r4 ^) B
impose liquidation values.% D& D" a o3 w: N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' T7 V- J/ ` ?( m8 u3 r* WAugust, we said a credit shutdown was unlikely – we continue to hold that view.
& a9 N* O" o5 N2 {$ O Q The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* W! C- D4 S' q( K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ J2 w) {" P# t# [. n, i
- y5 O( O. Q! `* C0 g
A look at credit markets
: A! a' L g: S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 A* r! o% m, t# D9 r/ C, e5 {. g0 N
September. Non-financial investment grade is the new safe haven.* W+ w" R; b9 q' Q' z6 p) R& l6 E: f
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 \& L' J# R U; t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 |# A. r1 {; o. o! \% h# N; \2 {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
$ u( q" L8 W# maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, {5 Y' p/ W% F" F# m& U1 gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are* i/ M4 M! _7 [ x k1 A% g( M
positive for the year-do-date, including high yield.
- D( x* T& X& g, O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ r& h5 b; H/ g8 K+ s! n9 Jfinding financing. e) L4 P E, q6 Z# L! X) \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 O* D# Y1 O2 C( ]3 Swere subsequently repriced and placed. In the fall, there will be more deals.
/ r7 X9 |( m; S2 w* x% @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 _, S k9 @! f% \
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' M8 @5 u0 z0 @. q; D
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( o1 o2 B- R* i/ S
bankruptcy, they already have debt financing in place.
3 p3 i2 O3 \4 Y3 n# o1 W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 l o, L7 X& F% |
today.4 q$ u) L: F% ~7 r) G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" {0 o2 P- ^7 O+ c" q9 c
emerging markets have no problem with funding. |
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