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发表于 2011-9-17 13:16
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Current situation# I1 l4 R' y* q7 [: H, C! z6 A
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* P% |* b/ ? k4 ?% L: M! Y% g
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may F% x3 [! L' C
impose liquidation values.8 L' d: p: E( W4 ?$ t5 L& R) C( C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& i- C- V: j8 G* P3 UAugust, we said a credit shutdown was unlikely – we continue to hold that view.. S8 t$ M3 P. ?+ k- q9 I `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ o/ b P7 ^ a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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' v7 h$ p& D" w: [- F; WA look at credit markets
9 ?" q0 O! ]: a) `5 P) O) { Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ R4 J9 z* {2 ?/ l, _6 E: q; j
September. Non-financial investment grade is the new safe haven.% _; ^1 C% q" f5 K& s( o: F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! w, P" h8 Y- ?
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 W' r/ {5 Z! e8 ?billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. @) r$ D; D4 ^0 L/ z; P! m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& }$ g/ G' Q) F; q& W1 N
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 x v$ j( L" f5 e+ F- `
positive for the year-do-date, including high yield.! T; n; S& k. b: o, E
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 F+ i2 Q0 w' d+ f, T9 E. P, k
finding financing.% X( P. |( @+ F5 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ x2 ~5 M# R( `
were subsequently repriced and placed. In the fall, there will be more deals.4 a0 G. A: a& d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- P; i O& U5 K% R( \# v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- E' R+ p" q+ U3 g$ R
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! G5 B2 h- v1 U! V0 A
bankruptcy, they already have debt financing in place.; p G: G3 ~8 Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 Q" q) {& m7 K( e
today.) B; e8 c! H$ D1 w% f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ ^# w( _, Y3 Bemerging markets have no problem with funding. |
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