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发表于 2011-9-17 13:16
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Current situation. b! g" F: Z9 F7 p4 [0 j* t4 A( K; \
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 x+ c# C9 z* Das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 I0 z( X) j# M: l2 }6 Y6 [( V$ c$ V; }impose liquidation values.* K. W/ O: l" ~1 V
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) e% e1 A" w4 i4 X2 a/ R ]
August, we said a credit shutdown was unlikely – we continue to hold that view.
) w6 B, N3 s% o8 S1 H s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) c2 j+ x0 q; N7 ]
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 r6 |' m/ J6 Y; d2 d1 d
# v$ K- A4 b2 {+ x. RA look at credit markets
]6 }9 I6 E) _7 C* l3 m2 [# ` Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 e* {# ^1 @: R3 y/ V: M3 E$ T* kSeptember. Non-financial investment grade is the new safe haven.# u+ R9 t; S$ {6 T& R
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 e$ I. Q% S. o6 U1 ]6 T3 b' U+ D5 \then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 L' G; n) T! u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ o, d. @) F }2 j! F! f2 caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 ~- Z1 s/ X6 y; [
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' F. Q- P/ o/ X0 e9 S
positive for the year-do-date, including high yield.
: T4 p% t6 j! z; r* c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; V. n; N" [' e2 j! X/ h
finding financing., E! i; r+ r( o* m2 \% U9 j, D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 X# {' k/ }6 s* |5 j
were subsequently repriced and placed. In the fall, there will be more deals.) |9 R2 O5 d2 |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 h- s: h1 J% n% C
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' }3 \( G, ?1 Z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 ^1 l. X, \3 G# dbankruptcy, they already have debt financing in place.
! C# {5 h# p( z. W7 M; n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 f! m- z0 q# e/ m0 f% Utoday.- a1 P' r- q5 L3 S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& D8 k- Q; C' N
emerging markets have no problem with funding. |
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