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发表于 2011-9-17 13:16
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Current situation0 f3 ?& }& A& u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% L6 }/ j8 O0 k9 O- v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 s: j+ U% E! {9 h
impose liquidation values.7 ?: x1 T5 M& l4 _* I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# y, ~) @1 U6 P& ?9 h( {August, we said a credit shutdown was unlikely – we continue to hold that view.$ U1 g; p* x. M/ P$ y) w" p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: B' d9 o, T3 p! l2 {2 B A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 _: o5 Z) V6 h2 }* s7 z
" W5 {, e/ V' z4 s3 GA look at credit markets* W% r8 L; I/ u2 F
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 D T4 R4 d, b! j' s- WSeptember. Non-financial investment grade is the new safe haven.; w/ t" U) s& V3 Q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% m0 h( o' y1 f
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 g0 L- `" s9 n) X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' Q- ~( ?/ o; n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ z% o2 x# X( h @7 E1 o' X" s* O( SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# t; l9 H& ^4 c& rpositive for the year-do-date, including high yield.
7 q/ H- c" g' n- ~% l% M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% G( d F' C7 g4 w% j% V; c* Z V: |finding financing.
@$ x5 d4 {" @* M. U5 I5 { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 _ v: K* g5 d1 B( `1 F. p9 Z
were subsequently repriced and placed. In the fall, there will be more deals.
- n) k- Q, k' b0 G8 c/ G' i Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' p' ?4 C2 n9 I3 V1 ~! Z7 I
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 `1 C7 D z9 K6 f. D& j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, ?0 q1 A% a' q u: d
bankruptcy, they already have debt financing in place.
1 |, e9 f! b F* G, I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
V6 L, J4 u: B2 b1 B3 P3 O Htoday.
0 F+ o8 s" `) ^8 o% `$ n Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 e8 @( B! f) S# t3 Z
emerging markets have no problem with funding. |
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