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发表于 2011-9-17 13:16
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Current situation% ?2 R7 k8 _9 [- S9 M* y
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# ]% U" n) E" D: a. o
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 D+ \" T9 m7 j8 ?, c* pimpose liquidation values.
7 j9 g. {# v$ @, z* T6 S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ h: q8 Q& V+ `August, we said a credit shutdown was unlikely – we continue to hold that view.9 j; [0 `- U$ z, a2 y8 Q+ H) [4 i
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: T1 \1 c! t0 r5 b( s$ N/ j9 I
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
5 j& m( o" C3 ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. o5 h# e$ R1 \( t7 g6 t3 g+ a9 kSeptember. Non-financial investment grade is the new safe haven.- i8 L# m/ O( W \
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) S+ k9 o$ y4 b* m7 o& G% mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 v* L: B4 B! ?/ L2 w" r5 y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 N* f& t& Z& r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: u! [$ b4 O, G4 x- i; m' J- R) H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- Y; d( H& w P, T" @: @
positive for the year-do-date, including high yield.
; n. _2 _8 r* p3 o3 B Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 v3 R1 s/ Q, i$ j6 T* xfinding financing.( j0 B. m- f" @0 ] [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' S! p* }+ Y5 n6 N/ P+ c! _" ^, rwere subsequently repriced and placed. In the fall, there will be more deals.5 c* |' N* {' P9 e1 W0 W7 }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, c! {; A9 Y+ K. p, c8 X% Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: o7 }, b+ {$ K" zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ U) K5 b. Q& |bankruptcy, they already have debt financing in place.9 C7 Z2 f! h- f( A0 {; q% k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 ^' x" O- t# Q- f% ?" ^$ y1 p
today.
) Z& ~ O' w) ^, x2 i) I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ _+ @8 T8 f$ J1 O+ f8 S5 _2 o" G0 gemerging markets have no problem with funding. |
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