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发表于 2011-9-17 13:16
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Current situation
! O4 \% L; _- P. H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ ~1 u. l+ m6 S$ @as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 s# T R* h) Q3 u" @5 t
impose liquidation values.
' ^# z+ i# o, r: q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, i: {8 @5 C+ o, o+ B! w/ @- S$ \. |August, we said a credit shutdown was unlikely – we continue to hold that view.6 k3 f1 j4 }" [" O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" n) x1 H, b: ]: L7 P9 Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
& [6 k& ]( T0 s: V+ {* S1 ~2 C8 o
' X i1 {% {; hA look at credit markets
1 e& O* y5 S) y# m* K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
c( q. @, d3 lSeptember. Non-financial investment grade is the new safe haven.
$ n# ?3 s2 R' `4 F5 o, j/ @, d8 \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. z" f, r6 Z7 w2 T( u$ C* C4 j& b
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, _# g P* b0 K) K) Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 ]6 w, ]# g7 f# R0 [9 m* u! T: R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% l9 u( F: U, }* J& C6 yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: ~ v0 F7 ]% c( f" J6 P, I
positive for the year-do-date, including high yield.5 Q6 `5 c8 D) d
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: A, T$ ?3 t+ L$ E! }/ Q/ w
finding financing.
. e( r2 q4 W& A9 ~ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they! P2 S$ ~5 [) a: N, f. e% P0 Y; B
were subsequently repriced and placed. In the fall, there will be more deals.
$ p8 g4 a: E {0 x% h2 T- y. ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& T8 e5 U1 s. m% ~6 O
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* d. ]9 K6 z3 }- ~5 O) O K. l k& zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 e( O2 C+ t7 q% d5 i# s
bankruptcy, they already have debt financing in place.
* `& K! w& e+ I+ w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ U. S# R9 A& w; a9 R1 g+ ptoday.1 _6 V3 S5 A# b9 m) P+ F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 R. i) u, P- ]! cemerging markets have no problem with funding. |
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