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发表于 2011-9-17 13:16
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Current situation; c2 f" w% H- P3 o1 N2 g' U
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- v, M6 G% L7 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 Z% ~+ p x( y# V& ]) H$ c5 N5 z
impose liquidation values.$ y, T8 |; b) i. h
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( H" D/ h$ ~" D5 ?/ q5 {% ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.9 Q: g5 _' s, ?* P2 A4 t; y$ Y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 W) q0 v7 [$ b B* {. Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
# P& s9 j6 r0 m' b2 l R: ]
# [# L4 {- ]# w/ |A look at credit markets
+ [) m3 `, B" W5 z, w: U5 `% V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! Z- G9 N$ N' _7 ~1 m4 g: ]September. Non-financial investment grade is the new safe haven." s) i, z+ u& J+ v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% F3 S3 q4 q1 K2 Q, O' {$ c
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 y* i8 l; x" y* D7 O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( \8 F6 c5 E* ]4 H" A
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 _% I* j8 J5 N; M) \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: T- m! p5 K, X j" G
positive for the year-do-date, including high yield.
, j* A# F, A5 K/ @" d: R Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 g6 v0 N. |1 L+ v: ofinding financing.
^8 @. I0 t5 ?( H Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! U9 g9 Q7 I7 v* M( d! k/ j
were subsequently repriced and placed. In the fall, there will be more deals.
|; t$ i5 H6 z+ G+ A1 z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ b6 [3 W) e5 c& vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) ]( q7 z5 n+ h( q5 J6 ]+ v; x) h( L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* Q# g! X# l$ b$ X- i* b
bankruptcy, they already have debt financing in place.: w) d9 ~( J$ Y i9 v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! x0 \9 U6 }8 mtoday.
; N1 S ^. ^$ Z; _; x" T Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% `& \7 ], s3 L7 V" K
emerging markets have no problem with funding. |
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