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发表于 2011-9-17 13:16
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Current situation
9 I- Y( |/ e" D, R& D9 W( \ m( S The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ Z& n! N4 s& x; [+ i7 U* @* j9 N
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, A/ @' U! u/ V( |impose liquidation values.
! d% J5 w' @; a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 z! {- N9 r3 b$ A8 q/ c3 ^August, we said a credit shutdown was unlikely – we continue to hold that view.; E: x! ?9 Z$ i3 u) }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension p. x, a/ ?) Q( Z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 |9 a/ Z& v& Z, kA look at credit markets" l' H' |6 t+ Z6 C0 z9 e; I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! q. G# P* [7 p* z7 F5 k _
September. Non-financial investment grade is the new safe haven.
4 _+ Y4 n) w* S4 L" R6 Y. @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 u( Q" X" `7 a S4 B" l/ zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 Q1 k3 X2 B! t4 S+ Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
Y y4 b. L: ~9 z3 U$ u- u) e! n7 V$ maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade _/ Z6 g" W( b
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; J. T. y* z7 w% v" V% {, G2 P
positive for the year-do-date, including high yield.# u5 p- X% F. ^+ P6 u" P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble f Z( w5 O2 K5 o/ n& A3 y P
finding financing.
& Y+ L/ u9 p* |3 O9 H Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ p/ P5 r v: G9 L/ f Z
were subsequently repriced and placed. In the fall, there will be more deals.; A. b/ p$ b4 W( r9 Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, {" w3 \) Y C0 S! t( V3 V- }is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; N( S0 d4 ~9 f& N3 f' Z9 O& o. dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. U) Q0 U0 H5 c9 ?7 Q* X) c7 |6 S7 z
bankruptcy, they already have debt financing in place.
. F) J( Q' ~0 l4 _5 P# A: o+ s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 @$ t4 h! {( E3 T8 C w
emerging markets have no problem with funding. |
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