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发表于 2011-9-17 13:16
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Current situation
# g6 p/ V: k/ `- E2 ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long Q. t* D2 R) ~5 S u4 a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, _% h! q x+ R" Y. C8 W! ]
impose liquidation values.; S* {0 \ j T! N( s
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ H) B; l$ U4 ^0 a9 w, k0 `August, we said a credit shutdown was unlikely – we continue to hold that view.
& U* V/ |+ t; s/ Z. j2 O4 ~0 L6 g: r The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; U5 C% S+ d' u- h; |* I5 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets% ]/ i2 Z, f2 F' h, m
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, |9 |0 v9 C5 A: O, [
September. Non-financial investment grade is the new safe haven.
; r% `! }' L; J8 @5 K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% V$ a; F' V- |6 f' E6 Ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( @5 {7 _% g9 G2 sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 {: Q; _. M& @ m4 O
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ K5 s, k! W- ~' ~6 c! NCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! a' {) l$ T5 k* Y6 D
positive for the year-do-date, including high yield.. R1 v/ {0 v$ e2 k* ]
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( \3 ^( x' e8 T b4 l3 w+ kfinding financing.+ {1 p U, M, z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- }9 A! h* Y J9 S
were subsequently repriced and placed. In the fall, there will be more deals.
/ ~- M: k) A6 D0 {3 B% r! ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: N# ?: Q2 |7 H6 I) L
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! X+ i( {& H: [4 b1 t, [going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 w; ?( T* }. H) u% M M/ obankruptcy, they already have debt financing in place.- z% S1 G/ b3 q: b
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! d G' b5 C X* j- D+ ltoday.: s* c, s- Y9 G4 T8 w" W
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* `, x: ~4 V# ?' demerging markets have no problem with funding. |
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