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发表于 2011-9-17 13:16
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Current situation0 J3 V5 M4 S9 W
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 g- m$ O1 u9 K2 Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' C0 p- V% V& L! v4 E/ V8 O/ Y
impose liquidation values.
/ |0 d4 s ] r& J7 A) _! t In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- r* c. l: X3 z- n
August, we said a credit shutdown was unlikely – we continue to hold that view.5 _8 U4 s- Y6 y- G2 B- }% R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
W5 ~8 p$ \# g: G9 d( Oscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets0 B& j( N' a3 ^% W C& O. B* U
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 Q p, c) a4 A: n2 v9 \
September. Non-financial investment grade is the new safe haven./ r3 @2 @$ }( J! ~) ^
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ [- e! J5 n( f4 A, S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& W3 ?* e1 D0 J) H; t; l- x! g7 @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 W: ]- C0 i; s" F3 ?4 m+ p4 saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; W0 S; O' `6 [7 ^, O- a; ICCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are g8 q5 M1 a: S" i
positive for the year-do-date, including high yield.
8 P8 }, J, M6 [/ G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, |2 Z/ |. y( [6 ~finding financing.) o& r, }7 s R3 {# ^! [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, k, q( T: B2 R3 ?8 D
were subsequently repriced and placed. In the fall, there will be more deals.
' f" z( n: P7 k1 v3 {0 J9 q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) \# Y) J `# y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. F! j9 D$ B+ K# n( O# i1 T1 `' fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% O1 T _9 s6 d& y9 N
bankruptcy, they already have debt financing in place./ B7 U/ k ~/ a+ I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 p' O9 Q, h6 S2 q( t( u }
today.
4 ?3 O! j8 ]1 Q& t$ ]$ x Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 A, l, n- ^2 @! [5 Y0 s
emerging markets have no problem with funding. |
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