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发表于 2011-9-17 13:16
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Current situation- f% w( M( J, N3 s" l
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 {: X; p$ k/ @5 G$ j k6 s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& E% E+ \6 I& j- l; Bimpose liquidation values.
8 a) D$ [# q! J. {: ] In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
* P1 @: L& \ I7 P Y: e! t) CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ i1 Z* Z. V2 J The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! l2 S% l# d; \5 u; ~ r! \. Z- bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets* z" E& t; N: |" J& j; ^/ P
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* y3 e0 n# \( a; a, _' U- u' D2 GSeptember. Non-financial investment grade is the new safe haven.( `3 M: L2 k6 R& u% ^7 A, S& s" u/ d- W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 h$ L4 [& K9 E* Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. _1 b9 t, r$ x1 w; P' B7 dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ ] x$ \' L1 r( b' @7 f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ n0 i9 O" G0 m2 l4 y* n* W) F7 WCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: {, O2 @, L+ H! x+ O9 ppositive for the year-do-date, including high yield. e0 c" A1 R# ~! _5 u$ m
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 ?: R" A$ u: O0 ^9 N) S( M5 |
finding financing.
. Z* ~2 P0 s$ i Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! ~6 r8 e: b9 y- l: K y
were subsequently repriced and placed. In the fall, there will be more deals. p6 p5 h$ ?; Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
w% T* N$ ~! ?# ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: S2 p& l: S- @0 a$ j) Y( d6 F% m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" x K- |+ Z$ bbankruptcy, they already have debt financing in place.' N5 j6 E$ R' @; L
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ [6 ]) O. l1 g9 S {today.0 N- P' Q- ^, ?2 P- N) F+ S2 o; t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 |* L5 W, n) h6 i, I
emerging markets have no problem with funding. |
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