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发表于 2011-9-17 13:16
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Current situation
4 B2 `5 V1 G8 S: x4 W2 ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. P2 s; Q$ J1 o; b" {/ J% G
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- ^$ k+ D" U3 K2 L
impose liquidation values.0 C d# G7 C/ w" Q: x
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 P S8 x* w) T% |4 e; gAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* W6 q4 U& E2 @! M The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 p( b2 ?; S' y+ {
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; l! b; s# ^) j6 a- _; X' }1 N
0 D" h; j/ |) ^+ ?2 `* h# aA look at credit markets! x3 G! b; H6 _5 `& ]5 ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; q4 j6 G( _/ ]September. Non-financial investment grade is the new safe haven.
/ F4 c; t" W, i+ s8 }# `& o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) ` F: a7 e! J3 a0 R' e5 k/ \
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; S& m; I* N& sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 N: S+ B0 d" ^$ a. z6 Iaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 m3 r. [8 _ [ v, fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
, r' @" ^. A7 h& J1 Vpositive for the year-do-date, including high yield.8 X% c! m) W6 {# n- r
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
8 p6 J5 u9 ~0 \) hfinding financing.! C& B! `1 _) }) E, R- ]8 R+ x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they; t$ F: v% @+ h' I
were subsequently repriced and placed. In the fall, there will be more deals.
( Y) d5 j0 j6 A Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" [5 ^* k5 F; T3 R3 L- [' A4 x; Q3 K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 ?1 Z, r z; ^# l9 O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" _6 N1 r: N( N7 N6 t% g1 h
bankruptcy, they already have debt financing in place.
: g! e* ]7 G! V& c, R European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. s* ?5 E# E' \% V4 T
today.4 @2 @ H8 M5 k+ U6 \0 N
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, ^% B+ R4 E' s. N% ^& f) J Xemerging markets have no problem with funding. |
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