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发表于 2011-9-17 13:16
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Current situation& z% e% w& s- o: j0 J- H
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- P5 g6 D# O6 B6 a7 a+ V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ }$ B) K# R( o( Y: @% N
impose liquidation values.
: e" s; `" z) ?: K" l& o, g+ y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 g7 z. H$ d, F$ u9 ?August, we said a credit shutdown was unlikely – we continue to hold that view.
9 G4 P7 L% ^/ a" V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. ^* {6 _* E; |6 g3 b% |, x
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 i' q1 p# }, _0 x1 R
$ u' N. |6 l/ Q# @3 p u' KA look at credit markets
4 d; U3 i3 J4 h& X2 _1 x+ D Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 J6 x7 [7 H( }# H( f
September. Non-financial investment grade is the new safe haven.
3 x- H% P+ |( ^) w High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: \8 Q" _7 k9 }8 f) | q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 M; q- v, H) B7 J* V# \8 l, }billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# p6 O" a# v2 E: `# D6 P2 k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 O& p& p' ?* X8 [ M& bCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are6 s, x6 i. O; ?
positive for the year-do-date, including high yield.3 h; F6 O ] ~$ R( i4 P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- T) Z& d$ U; ufinding financing.
4 ^) y# P0 x1 |: m9 d: V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( X6 m0 d; w" v, A; \were subsequently repriced and placed. In the fall, there will be more deals.2 U7 \* y6 l5 ~2 @- y( y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 n9 u/ l' {. ` S# k+ u5 W5 his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 l) H7 ^0 V' j- g! p' ]
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 i3 S4 _2 ]: Obankruptcy, they already have debt financing in place./ J) y6 R" Q( J- H# |
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) O. j- }, w% V* b6 \& Y6 Q& K6 A* N* h
today.' k: H( Z4 s* L! ^1 O8 i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ z; A& m8 ~6 M. r* Memerging markets have no problem with funding. |
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