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发表于 2011-9-17 13:16
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Current situation8 Z* c; h. R) v3 y2 u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% d( A) ?. e6 }' Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 x; E. A! Q. [" W% y$ `, c. zimpose liquidation values.
' S6 h, v. I5 f! I1 e E In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 z! F, `. i3 b! |4 N) I; D0 ~- [
August, we said a credit shutdown was unlikely – we continue to hold that view.
; b2 g: t6 @0 U# i0 J The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, `7 j* A/ i, b6 s9 T) |6 [scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets- ?# o# y# g- r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, k. F% ^; C4 V; W, I& [# W- ]. zSeptember. Non-financial investment grade is the new safe haven.
% c9 u/ ~) Y" G) X9 j1 J8 |! _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ z! J' a) j2 M3 h9 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $17 u6 p L% q! b% ?
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 ]9 T# ?( H/ U; \; kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# s* s( u0 U2 W$ ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 x3 m3 {7 R. B; K
positive for the year-do-date, including high yield.
' O% G& _- V9 Y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 l' I) E# C+ l3 P0 O1 n. t" j$ W
finding financing.. t* O e+ w, ~! i; @
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' g0 m8 Y- v# J7 lwere subsequently repriced and placed. In the fall, there will be more deals.
& m6 ^% C+ T# U% G" _ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ J! D: |8 L& C( y- V
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were4 c) `9 ^! H; K; Y% G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 Q8 ~) k# ^$ u8 k$ u5 L# @bankruptcy, they already have debt financing in place.' C* I0 j9 @5 u! {
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 c& w7 t C( G6 k Gtoday.
3 s4 M( k6 v# i6 c) \4 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 Y: `0 f6 ~$ m
emerging markets have no problem with funding. |
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