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发表于 2011-9-17 13:16
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Current situation6 J8 v& ?( C# u9 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! i: }# T6 O+ S5 ]* `! gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 L3 m! k P! \0 Jimpose liquidation values.9 \2 R7 e9 Y) J+ d |4 X: }: m% A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ s- A' @! Y* m' J5 h" l' @August, we said a credit shutdown was unlikely – we continue to hold that view., A/ Y% ?. i6 g5 i! H1 g% [
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 X/ ~2 f. K* Z+ t) X, p! iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) K& ]! l- R9 ^0 @
% }, p. E( H. H+ J3 Y( S/ B
A look at credit markets0 J2 }$ ?) X' ^5 B) o
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ s$ _7 V/ S, l) W9 y( a+ B' C
September. Non-financial investment grade is the new safe haven.
' _2 c8 z" x6 ^1 G7 H" v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 J ~2 Q) c1 ^% J/ J, b
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ `9 q$ _( Q) d8 a$ p8 [billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! o: t2 h8 R- N' p$ Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade C" o5 w6 P: b
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 b7 n. r6 w9 c; ?positive for the year-do-date, including high yield.$ b# x0 l' C4 s `& h+ R5 m
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 b7 F7 p9 a6 h( q& Z# }6 N
finding financing.
* K) y7 ^ J) { E( ^9 A0 E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
8 W& t$ O. y+ r; x. Uwere subsequently repriced and placed. In the fall, there will be more deals. |% _" s0 c. O. j4 w& q& @$ ] Q) b) Q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 A+ q- G$ f$ f: y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& T0 M/ k2 r2 |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ J) ~- L5 R& b3 z- [- j P% U
bankruptcy, they already have debt financing in place.
7 |+ p0 o8 {; v% ]) Y8 y European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 `$ @( W- g6 w/ r' B z+ S
today.4 e1 r- J$ x6 \- h
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 f9 z7 V3 Z$ p& R8 |1 j4 m. ^
emerging markets have no problem with funding. |
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