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发表于 2011-9-17 13:16
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Current situation" H/ x0 r' j6 C. ~5 A
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 ]: g( ]0 v! `4 I2 z* r! L2 @- was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 n O) A, A0 `' G* G' dimpose liquidation values.
( u3 C. u2 \2 W k) g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, k+ m3 Y, w0 C- r1 N
August, we said a credit shutdown was unlikely – we continue to hold that view.4 b* K& M* }8 [ R: K- D! v0 f
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! v& K- N# u5 W* a. a) ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets( z4 w9 I+ ~* r3 i& z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, e, F+ z$ O& O& ]
September. Non-financial investment grade is the new safe haven.4 q* J7 \) q/ x1 n& e. W* ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" {( q1 o7 A. C+ q* G$ O: Tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% h" `3 ^$ z- u- m; U+ t& }7 y: Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: m. p2 ~9 e s4 Z$ v _, _ m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, }8 }; z+ h* x: ECCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) T, ~8 }4 L/ I* D/ J" xpositive for the year-do-date, including high yield.! s6 i4 @$ m X7 P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble ^3 x8 L/ }& y7 \
finding financing.
" l7 o3 ^, n3 D Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& I% Q- e" C2 E# j8 t. W! B
were subsequently repriced and placed. In the fall, there will be more deals.
& J M2 V7 n* t' E* P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 s' U6 @9 g0 T) s+ q2 M. ^& B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( x( V8 I$ c d- m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 n1 W% b; I ^" d+ \3 Ebankruptcy, they already have debt financing in place.
+ Y, A( z1 P. C: ?% x2 W9 `5 w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" I) G5 Y; M* W; X+ D$ Ltoday.- m( H& k5 c2 |* A6 ]0 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! Y' h$ v7 c0 u9 H- |emerging markets have no problem with funding. |
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