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发表于 2011-9-17 13:16
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Current situation2 t+ m* b) D Q' H) _6 G2 y% l3 U
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; m& r- p7 N# m. q$ y, A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' d6 z8 Q& ]: S5 d$ Timpose liquidation values.
2 J. @& L7 p4 s' f# M) E' M6 e In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ z3 T) \8 R t: z( e% P- Z% v
August, we said a credit shutdown was unlikely – we continue to hold that view.( T: d0 I, k6 ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, |* O7 l# K! ], escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets& J/ z1 y- H$ v7 e$ q+ Z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% _( i8 P/ ]' ]2 V- rSeptember. Non-financial investment grade is the new safe haven.
- s& L' E! b0 ~9 e; o% s High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ |, [1 c. r% n e; Bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% S, U/ m8 I: U
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( T! U# l6 { U: K8 B, s& kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 Q3 S0 E" p4 x a" U0 SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 Q( }8 h0 ]: { e2 w$ i, Y2 \positive for the year-do-date, including high yield.
/ F1 j2 n( T0 X: v4 j! S! B Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% o7 _5 t* A, O* h$ P. h
finding financing.
3 P" C8 q7 a. G: a2 T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 j" Y/ P% R$ X: a& `were subsequently repriced and placed. In the fall, there will be more deals., a3 v$ h+ `% E3 ~1 Q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 E0 q( g2 v% {7 V( {, f
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ A8 C4 ^9 ^3 G* w+ R1 B$ U
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' O3 M" P- R/ U, y+ c" S0 n3 {$ ^bankruptcy, they already have debt financing in place.. o) h/ `2 l4 q. ?( k6 a( |
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain' G* n& }6 [) N4 H0 r7 D0 n) h
today.
0 ?! a$ s" w2 t7 `/ n7 ]2 B Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) i9 ]4 L" U& r$ t* U- memerging markets have no problem with funding. |
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