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发表于 2011-9-17 13:16
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Current situation
- d) Y I4 J6 ]: X% T$ l& N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ R# C1 ^6 K+ `9 mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 {0 q$ F s `# n" x
impose liquidation values.
0 n9 k( H: X" ?$ l: R In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* W4 J5 j2 z+ `, K' R2 n X0 W
August, we said a credit shutdown was unlikely – we continue to hold that view.
: B; f" k- \# @% E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ s! x. P, k" O0 x2 `. H2 D Ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! k8 a0 {2 ]5 F- a# V
0 b6 S, P8 B6 J; a! [- U2 t0 }A look at credit markets
9 y1 |1 t: n: X2 ]* L$ v* z, Y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" W7 s3 I" N% f
September. Non-financial investment grade is the new safe haven.
( W1 Y" v2 \7 E# w& t' o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* S$ j5 W( C; q9 N; l! B9 Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ Q( F A! f8 A3 i$ f$ r6 H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ ?/ [/ J' m! y$ baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 W2 e$ Y6 ~3 J7 w' H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 `7 n& {% Z/ c& I+ {! fpositive for the year-do-date, including high yield.$ M/ u2 ~% @$ Y: m9 }5 ?/ o
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% {3 h3 E( k6 v
finding financing.7 g1 V x/ I( r+ b3 a5 J) L
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" J! C/ p! ]& E! i8 v! r
were subsequently repriced and placed. In the fall, there will be more deals.# F' A/ L3 ~2 H. |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) O% R$ o# S; F& t/ zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: V6 M" d7 c1 l g2 x( }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' K9 g2 w% u1 N8 g+ Nbankruptcy, they already have debt financing in place.: D3 @. D- P4 Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" @; U% R' u% Y5 e0 N |today.3 ^5 K* U1 r( `; Q/ S5 R) e6 z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 S2 {3 D, p' a) d% O+ Hemerging markets have no problem with funding. |
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