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发表于 2011-9-17 13:16
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Current situation
3 d( o0 G) W% b% l g( U$ S$ j' ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) `6 M' P( q$ A% |6 N( y7 G; J
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! I* I( u1 R0 l* c! m5 }impose liquidation values.
7 \$ Y; h3 ~, P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! B( R8 ~, `% F( X$ [& ZAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 d# K/ }# {' Y: [$ z# O6 q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ x: _8 D5 _" l2 L5 Z$ g; Y# {# a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 A* n1 X/ ^9 V5 ^, D J" e
3 m7 h8 D+ ?3 f+ v8 s. ?5 ~5 HA look at credit markets
. P+ ]& S" o1 A% T; ?3 \$ r Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 d& w/ ~# J# QSeptember. Non-financial investment grade is the new safe haven.
( T- c# w4 P9 p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 V0 d0 j7 C {1 t" N
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- ^+ @" b6 s/ W+ Q% t" }8 ?& Bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 o7 U5 D1 G+ r0 G8 E
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ \) S m, @: p0 J1 K2 XCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 O5 V0 Y1 A7 V+ mpositive for the year-do-date, including high yield.
5 S4 D. m. p& P# M& x9 U Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 z2 H/ w [( w7 _- q8 z0 b
finding financing.% R, a2 B- q* }( A! W) `$ b! t2 Z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' r1 e. e: V8 f0 u
were subsequently repriced and placed. In the fall, there will be more deals.
" K+ e `! k6 K' W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; k( C3 M3 T3 i5 z6 [is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- M% ^9 @, D; W; m U& }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 T! F6 J' M9 I b
bankruptcy, they already have debt financing in place.
& S- u6 [# v9 ]0 D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: y1 u3 U" o2 v# r6 [8 ftoday.; Y+ |$ T1 Q6 F* i3 y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, w* H; l z7 E! d1 [ `3 C
emerging markets have no problem with funding. |
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