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发表于 2011-9-17 13:16
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Current situation
: D6 x% R9 U! b T$ K5 \/ ~; J0 \ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" `3 e r& I9 l8 T1 O- M& f8 J1 w2 Tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* f( o2 I! ~2 b, |6 s1 t8 Qimpose liquidation values.
+ v }" h5 e/ |2 D In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 @1 a1 j9 X# v# S) S' R( @August, we said a credit shutdown was unlikely – we continue to hold that view.( ]/ h5 k6 j4 l: L% f7 X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 R" D+ F/ W, w0 h$ _4 Escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
" H4 L5 I8 S( ^5 z0 t, e- o
& t: b# T( ~2 q E. X$ hA look at credit markets
' d* e* U' l; y: p1 U7 t Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
" `, k3 f. T. h3 C9 Y+ b4 H$ hSeptember. Non-financial investment grade is the new safe haven.
+ x9 e3 |# [; s f' e! @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) g/ ^1 H; L% N9 x8 e6 c; qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' C0 ~1 x6 p' t
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ g5 Z3 x6 R8 X4 @( j6 ^. y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 d; X5 @9 |3 n, {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 p( R5 E/ @: spositive for the year-do-date, including high yield.8 U, z8 I& Q4 e0 n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 U' R; S% f m+ m: [3 q( O4 Y! T
finding financing.
2 h9 D" G0 `% I5 m" g0 v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they8 `3 B& D$ p. x- R7 B( h$ S
were subsequently repriced and placed. In the fall, there will be more deals.
9 t2 E# G/ X: E; c; N( @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! s3 I( Z6 L& L: r5 Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! G0 g3 F; _% R% k; I) Z, A$ [3 a
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- y$ u3 V; y( R' X, k" F4 M8 t* pbankruptcy, they already have debt financing in place.
) s$ W. u+ q# A3 {) J3 f+ G) u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 H) u! C- a7 A) s$ `. e( s
today.5 |% B/ Z5 G4 [5 ]4 z7 M
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 W, T; q) \9 V" Lemerging markets have no problem with funding. |
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