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发表于 2011-9-17 13:16
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Current situation6 d5 K- |4 b7 S7 d# v+ P
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% b+ k' q. @9 H" T tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! Q+ |1 c4 P# R+ { E
impose liquidation values.
I8 c' F0 B% l. ^, E/ G In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- }% y' K: ^6 s' a
August, we said a credit shutdown was unlikely – we continue to hold that view.' i7 I5 u2 ~% I+ u# a4 N( C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" c! A" b" H: G5 C
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets0 a% d( d* v0 R4 m; A7 O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% ^2 j1 ]) F: l; q2 p
September. Non-financial investment grade is the new safe haven.* a# V9 s9 ]" K1 ^% d
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( j( Y1 T$ K$ nthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 G8 I2 s0 {+ W' ~, l. c+ Q- Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ E5 V% R+ ^5 L" @3 W
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: ?' T5 X, D3 |% `9 n$ |' G! n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are* S( b- {5 `# S$ y. L
positive for the year-do-date, including high yield.
( i) J8 E, ~8 ~: ^# Q4 J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 t5 r6 [8 j7 c
finding financing.( ^! T. c2 ~, ?7 p. q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; C5 J1 f) t3 l# k1 l% ^
were subsequently repriced and placed. In the fall, there will be more deals.
& z. N4 M! O. c' K- Y$ x9 D$ Z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 W7 K' h$ y/ h: P4 I% r. ?3 D' g+ Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) `9 m4 S R2 b# Y" l4 G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 [& {) b: G. J* ^& A, ebankruptcy, they already have debt financing in place.( U z9 a: B! ]/ \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain | y+ `) f; R. u w% {- Z
today.
1 a2 I) Z* s' X0 N/ \- k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( Z1 w8 i3 G! V' p, iemerging markets have no problem with funding. |
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