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发表于 2011-9-17 13:16
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Current situation" t" _8 L& ?, C( y
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' N( A x T- s2 z( ?2 L& a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) E1 ?- @# y Z, Y. W
impose liquidation values.
$ X8 }- I* \8 V In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, E- U. S5 `# }/ W; [3 M
August, we said a credit shutdown was unlikely – we continue to hold that view.* T& y0 F$ k5 K8 Q) K. C) ]9 @1 J; t }, t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& X# r( h2 z" t6 ]: P# r9 j. Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ {# Y4 y- l" U
+ q1 a* A. W; O k( ]A look at credit markets
( ]) U6 `2 B' N: r$ ^8 f1 ~+ f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* u* M& w: W- H) ?& q. S' mSeptember. Non-financial investment grade is the new safe haven.7 @/ u* T; t: A; A; n# r1 } J
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& B+ t# Z6 `$ b8 W7 {then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 R$ H8 |7 S# s/ q% I g; Qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' k, e0 l/ _ S5 i: M3 K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( A" G z$ W' {. \" OCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! l! r+ T$ J3 b1 G2 ~0 m( b
positive for the year-do-date, including high yield.
9 z1 n" |) Q: H$ I Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* W6 t% `- T- T1 b* W, ffinding financing.4 j* S+ J) Z3 b5 w+ K. ?5 v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ T. s2 _! `# g
were subsequently repriced and placed. In the fall, there will be more deals.
/ g4 X* |& v {; e( z& C$ s& J% `) w) l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 h6 p5 U3 V4 T5 O9 q: m1 P ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ j4 d- I7 z. Q* bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" K, l/ y) L) I% h; b8 Y9 _9 l% gbankruptcy, they already have debt financing in place.2 }0 R3 K; b: u0 |/ Y! \* f
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' b& Y. `+ W E Btoday.( i; U+ v7 i/ u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& E: w7 c8 H! jemerging markets have no problem with funding. |
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