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发表于 2011-9-17 13:16
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Current situation3 f) P0 e2 {1 P4 H! ^
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. _# ~9 b- `4 v* }2 c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may F: \+ }1 e2 x" w; d
impose liquidation values.4 |! U. A9 \- m+ X
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 j* E. x" z+ [( d$ Q( i3 fAugust, we said a credit shutdown was unlikely – we continue to hold that view.% [1 [/ G# \% _8 D3 z3 r2 O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension p8 N1 R* ~. u( y- Q# r8 K" o- U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. I# s. Z# s. Z) C. H* E5 j# OA look at credit markets$ F5 `. {3 b8 K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: f% ^' U. m6 M s9 j9 U
September. Non-financial investment grade is the new safe haven.
. U3 i) A3 J. K$ S) b* K# x, W High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 r& A. { Q- p; e
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; {; c3 k9 o/ i+ e3 s2 a5 F4 pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 i! Y/ q* R7 n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 N: D3 ^# T: Y. NCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 E$ _5 @; n: @/ a3 Kpositive for the year-do-date, including high yield.
_+ N0 @) l7 x. z9 i, J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% I9 T2 h" n9 e% ^finding financing.
! t8 t) M7 t/ v2 I" k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 v% g% U5 U$ ^( Nwere subsequently repriced and placed. In the fall, there will be more deals.
' W& }% F; f d$ C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" q. \% m7 q1 E2 O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 d* x# _# m- Q( u0 P* f5 vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& K2 g& v+ L, x) q
bankruptcy, they already have debt financing in place.
, Q& e2 t1 Z- Z7 Z$ P European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ G* f9 U8 ^9 `5 T
today.
3 D c0 [9 v! _' ^# I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ l" [. j, ~. e
emerging markets have no problem with funding. |
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