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发表于 2011-9-17 13:16
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Current situation, F5 A! M9 T, [1 M; D& ?5 B7 T( d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& }, a" K7 k! t/ y1 B0 pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 _" p0 r) l2 ~, Z9 W% Q) I$ T: rimpose liquidation values.7 @1 D: u; g9 b. G5 l
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
Y/ k2 O3 \6 A0 b, N6 I: rAugust, we said a credit shutdown was unlikely – we continue to hold that view.( N& g- u: G& O6 s( z- [- U. O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# D( Y* q: R* Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
1 L! a% K7 \* d3 d5 `( P, n4 I- g e1 _2 a5 F- m6 r
A look at credit markets& k: g! ]8 z J M" K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) O4 n, }6 f8 Z" f. K# X: O/ vSeptember. Non-financial investment grade is the new safe haven.- B! o; ~0 f$ |! o6 C
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& r1 Q7 Q" J$ { ]7 r4 f% u" xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. t4 c' E. f* r" _1 q" p/ d6 Ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* o" J& X. m+ e7 ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 ~* ~ I4 W' Z e: w B# a B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' B% e O U& t
positive for the year-do-date, including high yield." Y: T8 r6 O* B1 v8 A# s7 [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 }! M. b+ \/ l) s H# D
finding financing., e# x1 O) N) L. ]# k
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, q6 p4 O6 S( o' ~& c/ g" x! qwere subsequently repriced and placed. In the fall, there will be more deals.
$ j8 d/ \+ H, \. [* J/ G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' v0 q) E1 W0 R% x% s; n6 p6 q8 I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 D( ?3 V# l$ ]# d: c* s, q- ~4 dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 x' `6 Q4 z1 b+ N4 {6 Y$ A
bankruptcy, they already have debt financing in place.
: Z" s) l; ^2 `9 b6 r8 ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' i+ a6 I: ~7 p9 B! D- e1 O0 ?today.
5 ]; _" J, k, s3 @4 o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' h3 B& N( Y+ H6 f
emerging markets have no problem with funding. |
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