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发表于 2011-9-17 13:16
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Current situation+ |. [3 q, q; g C5 P" Z/ L( f8 N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' V; x0 D0 [3 H% H
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 {$ i: ~* K! I9 P3 ]impose liquidation values.
) R# s& P2 J1 ` In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 v* M3 s. [5 {August, we said a credit shutdown was unlikely – we continue to hold that view.
9 U$ k% R' e6 ^+ G' i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% M" I o m0 e+ d# {9 ?
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 w4 ]5 R9 B7 ^! u$ v f6 M/ u
2 Z/ u0 }# U5 v$ i! F; vA look at credit markets
( B% @" {3 q* ?# g Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ [; p+ M4 z$ v5 x, ]September. Non-financial investment grade is the new safe haven.0 N0 y7 f; f3 ^# U/ F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 k2 b& E2 n( o) ^) P' o5 D8 ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% d' h6 d9 }2 u- ?% wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 z3 _: h o6 P+ C6 L2 caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, W: u d6 l! ]' xCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
, [4 L* I8 i7 u; o9 a( i2 Fpositive for the year-do-date, including high yield.* }. s x d4 f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& j1 p4 S/ N1 a( F8 _1 Y
finding financing.
\7 I9 T1 W Q, B- x( r' E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) V, x- @, T' r9 @
were subsequently repriced and placed. In the fall, there will be more deals.* A- ?* P: i) |- [, R( i
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; V( _5 H: ` h4 k4 k! Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' R, F2 `/ U x$ {# X' w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ i. O7 v9 |8 Q8 F4 o' P$ u
bankruptcy, they already have debt financing in place.0 B! J) f4 [% G
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: Z# `$ f% a" f+ [, U2 F
today.
- |0 @, d4 A& C. L9 k, C7 v( J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ K4 p) u: E& |# j/ Q
emerging markets have no problem with funding. |
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