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发表于 2011-9-17 13:16
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Current situation: r4 K3 ? l; O0 V$ R, T v
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 b# R. s7 {9 y3 M7 d$ x) [as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# F% i! X! I" K7 e* s+ Yimpose liquidation values.
2 r( [% U+ S4 d In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! ?' b! m \6 J$ \; w; A
August, we said a credit shutdown was unlikely – we continue to hold that view.% l# s! ~& E9 U$ Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* E9 A: s/ f+ Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- o0 O& Y7 v: g7 \3 |
0 E% I- E/ ~9 @* r. ^A look at credit markets1 H) }) e C8 K* F
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- ~+ N/ ]. o9 n, ~% l
September. Non-financial investment grade is the new safe haven.! P" R$ e$ o! [& u4 O/ J" k
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 H( s) z9 o- ^. f6 uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# F" @6 J; h: n; L
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' w) t& Z1 G. u2 _0 j+ z' z8 ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 ~" m) V# E# r9 y( O% n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 h/ k) W7 b9 C, F( E; m
positive for the year-do-date, including high yield.+ B0 M9 E4 ~( a; I0 Y! p7 j% r w+ d
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ L M9 X2 D; k G
finding financing.2 c- K5 {- l! n. F5 A1 P- W" G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' u+ k3 G% I- J; \( S$ b' W# awere subsequently repriced and placed. In the fall, there will be more deals.8 ^8 ^1 F8 W+ h1 U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% ^7 h) a# {( Bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# ]) q: T: F b( p7 x& J1 Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 d5 U9 z2 ]7 w- s5 L! e
bankruptcy, they already have debt financing in place.
1 ?) S7 W$ ?8 B9 G+ i European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* j6 [$ |) E6 U: _3 Q$ X' J
today.
3 V' U7 a( d& u8 t$ p1 F Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, U- J+ d2 T: n4 A% ^0 Bemerging markets have no problem with funding. |
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