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发表于 2011-9-17 13:16
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Current situation" O1 ^: W% f& p3 e+ d" O+ x$ X
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 Z! W% z S' g. C" k0 w4 s6 m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( ~, H6 ~: l! {) G% D& m% z( Q8 ]" Y+ Nimpose liquidation values.
+ E% ?3 ]! O( p8 F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ R7 t$ P3 ]# Q& F$ q0 s' A
August, we said a credit shutdown was unlikely – we continue to hold that view.
- k$ V- s- s9 {" K$ ? n The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 s$ k& e0 m) N. c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
2 G6 I. O1 B" S) \! {1 `; O. T$ ^# h% O
A look at credit markets
& Q$ j1 O5 I: \; e2 n$ W( g Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* g i/ q. M& {" S; ~! ~8 G1 |September. Non-financial investment grade is the new safe haven.2 P) v. q" t# C |
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 w. ~: J! [& d6 d! Z N
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 _* p2 b! W, p9 y* s5 W. h3 }
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, k0 |+ ^ H. R. }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. l1 R* P+ Z8 x& lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 k' x- R& }& b5 V8 Ppositive for the year-do-date, including high yield.- L6 X0 ?- _! |4 m$ \6 i* s
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 D, S5 {3 c5 M
finding financing.
7 h( {4 Q. t" h' x7 B8 n- W% d Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: F3 _% r0 U" Jwere subsequently repriced and placed. In the fall, there will be more deals.
| y; b% j# C2 U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& Z& ?. R' \: c' _is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" K2 [5 `/ v* D* i/ G+ z7 p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ ^. o; T+ |9 j" h( o9 A/ V5 m7 ?bankruptcy, they already have debt financing in place.
; H4 l: |) r4 t$ d( _7 ?9 B/ I( ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 Q& ~3 p. c0 p- u+ j
today.
8 o# ?8 C$ L$ p: t" ~" ? Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 V4 H$ y2 A7 X7 v' a8 F( n6 U: V. i
emerging markets have no problem with funding. |
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