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发表于 2011-9-17 13:16
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Current situation/ U' ^; m! U' w" L: ? O) [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ S- W9 P4 h8 a E8 y5 Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 @) d; u# b% t1 R; `6 a
impose liquidation values.
) T+ P- T- \2 d) j In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! P+ ]$ _' ?( g$ J, _$ DAugust, we said a credit shutdown was unlikely – we continue to hold that view." w' }0 `. Q7 }$ g6 w
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 y, d. \1 f. d. M7 Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
4 I$ d( ]* ` D; H$ {$ S' I
/ ~) H7 k* K) o* b! B! R0 QA look at credit markets, {& S/ u% D6 L. D9 {/ S1 q( s
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
3 e6 j. k& p" e" w3 W- @September. Non-financial investment grade is the new safe haven.
% j N0 k2 K9 `, ^ ]" U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 M) y5 Y$ O$ R7 r9 r+ |+ j/ ?
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! M, O/ ]- O% N- Q# L& n' @# ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have w& T/ {) [- G5 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 V$ l: V, ^7 X# LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 d# X3 ^3 e6 i! ~$ _* Y! O3 ?. k R8 S0 Qpositive for the year-do-date, including high yield.
" A2 e# r% |$ q3 m. ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ N% e! M% Z! \: p" S
finding financing.# j* ?4 Y6 ~7 u0 |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% J6 k0 Y4 q9 y& ewere subsequently repriced and placed. In the fall, there will be more deals.
5 Y, u8 p }: ~ t+ L- M" R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* l) I" b8 w6 B9 \; Y9 Qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ A. d; r0 w$ d' v1 Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* n! U" b; f: x5 l/ f
bankruptcy, they already have debt financing in place.* G! v: n3 Z o: H- }& q. [' s4 h/ Y. V% _) j
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& I+ ]* L; L$ A" g2 ^today.
, ]8 B/ G/ @9 L% \7 k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& K5 X7 n4 y. I- G0 _% F: T
emerging markets have no problem with funding. |
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