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发表于 2011-9-17 13:16
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Current situation. s9 O6 c4 Y8 G6 K& ~; u+ d2 W1 T& f
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 ?: |" w& w4 Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' w) x# ]& B3 ~& s4 V* Q9 Pimpose liquidation values.
: a% z3 p# d- L( _4 M6 | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In& F' E7 F' s6 F! K" r
August, we said a credit shutdown was unlikely – we continue to hold that view.
) O* ]" P% d( H( Z0 x/ a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 \: A4 y- ~2 i* N# T% d5 m1 |7 Z. dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets: A+ c4 l8 {- \" _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 J& P+ C5 E- h* E; ?
September. Non-financial investment grade is the new safe haven.- W9 g4 W% ~3 d; V- u! m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 R3 F+ D. M- s! ?7 ^& k) Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% \. i( N2 @4 `+ q0 Rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 K! ^- r- a5 \0 }+ |- b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" q" d4 C' E& S, ` J' v2 d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 n* x8 f3 b. }6 Y0 s5 gpositive for the year-do-date, including high yield.
9 L( \7 v: ^: M/ u4 e0 F2 ?: c9 ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: }9 z/ u$ [$ U0 d. P% @* m. ?finding financing.6 @. T4 m5 K" ]
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 c& ^# h0 y0 u$ H" Qwere subsequently repriced and placed. In the fall, there will be more deals.
; ]/ C6 u: A: z; i& Z% Z' \ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 k! V0 G& G3 ~* J, k4 k1 W
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: E4 \6 b: d. g. ^, o
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 ~6 g7 t: o& u! r0 G
bankruptcy, they already have debt financing in place.
3 B/ E3 O5 N* M! f# k0 p( Z7 o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain _+ P% n. n a9 g& ]
today.! Z: X9 o ^& f+ W& m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 K2 W! r; r- O* J$ x3 _) R
emerging markets have no problem with funding. |
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