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发表于 2011-9-17 13:16
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Current situation
6 _9 U1 E# D. G% z: t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- N" b; L$ d% ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ H9 I- M; c' Z. b* \impose liquidation values.
3 f5 w7 d" A; H, S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, R5 n8 I0 J6 e% O, g1 RAugust, we said a credit shutdown was unlikely – we continue to hold that view.1 x3 K* w% p0 J7 [& l7 ^/ C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) M: G( W: z7 v5 {* tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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2 L) m) U1 v6 t6 j+ @A look at credit markets
' {7 ]% H9 {8 n Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 E- s% p' k' h3 q2 D
September. Non-financial investment grade is the new safe haven.
! S; o, z6 d0 F2 T$ w/ l. t High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, \# Y q6 A+ o& k& R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) x) V# i- R: j0 @) _+ qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 \2 a- H( }5 xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ [4 K& M& z, x5 m+ O8 O0 R
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( f) X+ e7 k% c* ~+ {5 tpositive for the year-do-date, including high yield.
1 k9 @1 m9 d* p Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 e0 O$ ~" E& y* L
finding financing.5 i4 G0 j) t: H
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. f: X6 T/ e4 r! B$ u+ b
were subsequently repriced and placed. In the fall, there will be more deals.
# _* }) b) ^! {; k( h4 V$ J. Q& N" h Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and8 B' r5 J( G7 b) z! O) k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& \* h7 ]* r( I: V8 Z7 p% d
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: ?: s0 o5 F* v' T: h
bankruptcy, they already have debt financing in place.
2 U/ C$ ]0 w) q( i" c/ V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) W( R7 @6 j/ [6 r$ U0 F3 ptoday.
: u6 h$ ^3 ^* B0 W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. K- a2 E5 V, J) g4 @emerging markets have no problem with funding. |
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