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发表于 2011-9-17 13:16
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Current situation0 s) D, }; ?# T5 d
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; Y, N; w8 Y8 Y/ O4 |5 D9 Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, ~3 O4 u# n" m! ]0 I8 ]
impose liquidation values.2 I- v" y1 m( j% T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. F( |- G! `! Y4 I. p% LAugust, we said a credit shutdown was unlikely – we continue to hold that view.( R0 @- _& x! }8 b& q+ @
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) `2 D' w: c8 V9 y- V6 }/ r+ R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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' R8 e( F* n- r9 v) vA look at credit markets
( y2 a& u4 a# ]7 u8 `/ [; C" f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ e3 X$ m* y# @( R
September. Non-financial investment grade is the new safe haven.) Q6 i6 Z J, `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ v L( Z' l0 g* K1 A4 L
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" I1 V t5 r+ y6 v8 q6 G; [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 l; Y( g' H7 d: e
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 |$ j+ d% h, K+ W9 e1 {# pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ F3 U" P: v8 i: Ipositive for the year-do-date, including high yield., ^! n7 A( i/ A& j( D6 y& `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 H; |: x; \% L- O7 R( I. a
finding financing.* a* O% L* G7 S( e8 D& c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ T' V1 J- k( wwere subsequently repriced and placed. In the fall, there will be more deals.
/ E1 ]0 X. d( A, U9 |0 U2 j e* u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and Q- Q% ?( Y/ H/ o8 \+ V
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% A t# W- t9 g/ [. F5 z3 f+ l
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! _2 Q2 h+ U9 g3 f3 [1 V" d5 qbankruptcy, they already have debt financing in place.4 L6 `: S% @/ |9 r4 Z( o
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- l, [; F9 g1 P' [0 ^" Ztoday.
$ P5 c! {0 b0 N& B% Y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, d" W# v$ i) T" K. [' i
emerging markets have no problem with funding. |
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