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发表于 2011-9-17 13:16
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Current situation
3 v, X/ [1 @0 D6 T) V+ u9 I* d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 R6 I# i# X2 E1 D: C
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 o. F- ^$ O5 B( [/ e8 P/ oimpose liquidation values.
7 |; K; Z6 x8 K4 ` In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ @: A4 z. e7 |7 n2 A' H1 U
August, we said a credit shutdown was unlikely – we continue to hold that view.5 w A |, \' N; w
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
/ a, o. E" L, X1 xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) }' S8 r* ]* d! |
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A look at credit markets
/ P9 u B& t% s$ }* G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 h3 p2 s. U, w) P( E
September. Non-financial investment grade is the new safe haven.
# y/ L9 x4 J4 r" N( \5 Q/ O High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 [5 N; I% D1 C& e7 K( I2 othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 D/ a0 ^. H0 n; Y; x; |+ _* G" W! a0 fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: ^0 c0 x, H" ~2 Q# q0 O7 r& D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' q$ [) E3 {# v. P# O: a* CCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ S) D: c2 d1 b8 d- s3 y) Q2 S. H
positive for the year-do-date, including high yield.
- k% v4 D! G7 z; z( A4 g! m# @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( i/ e& q* R! I: s* p$ ^
finding financing., @& o! M4 B& ?: D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( S$ n6 A9 _* D: D
were subsequently repriced and placed. In the fall, there will be more deals.2 s; R) w' m; h# c
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 K- t7 U; l# E& n0 uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 t+ y3 D- F+ a1 O. q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 L3 G% b6 F$ H: ~bankruptcy, they already have debt financing in place." q/ U6 K: r% [1 @
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 z2 A/ ?% }$ p, n4 O4 v+ D
today.- g! r. {$ S$ D+ F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 _, ?- F$ d7 ^4 Femerging markets have no problem with funding. |
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