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发表于 2011-9-17 13:16
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Current situation4 i. G. L, [% m8 `' e) m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: L( t/ `: y g/ a% V3 g. ~& uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
p$ A/ Q. r& K0 w+ F+ N! Eimpose liquidation values.7 G) A# w6 o. ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ Y$ p$ w5 \; s1 eAugust, we said a credit shutdown was unlikely – we continue to hold that view.
1 Q t, o( Q# N" A6 k0 i- h The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" w: h( g3 ]9 C. h' t, E
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! K8 G& z7 J5 F! ]: u+ b
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A look at credit markets# N& s$ I- b& f' d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. L- C9 t+ Y4 z6 X6 T! w* {7 y% }/ zSeptember. Non-financial investment grade is the new safe haven.
% R& J* j+ A/ Y ? W! t2 B High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% c, m" U1 F* G5 W# s! o0 I2 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* H3 h1 q9 s8 }% I- ?9 T: [, abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! L, m/ o! V: b6 A
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 |6 v8 Z+ d8 r( h/ d. cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ a3 }+ e3 t( ?4 Q$ U' j
positive for the year-do-date, including high yield./ t& x* e, P1 N9 r* h, O
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- m' a) H& e1 j% lfinding financing.- q* f0 \: O6 D6 Q" p, p9 U% K/ b
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" w9 N5 @' V" W/ F+ ?. c7 q
were subsequently repriced and placed. In the fall, there will be more deals.' e: Q! M, S0 Z: y9 D ?! e9 g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* K( ^, M, l& j5 d3 n+ Bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: i" u/ r7 y0 M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ {5 S' k0 y9 d2 ]5 Y/ lbankruptcy, they already have debt financing in place.
* T" m/ n4 ~- E. E# v European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) w3 V5 }& t. \2 Stoday.' c1 p2 R: n: `) P, W# b
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 R4 F/ m0 h. ^, f7 R' o' i
emerging markets have no problem with funding. |
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