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发表于 2011-9-17 13:16
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Current situation8 l+ h; k7 U0 s2 R
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 q+ j8 Z" {8 c. N$ R( M0 |as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 y1 X R3 e' N, f9 t- |" fimpose liquidation values.
5 D X* R8 t: Q) I* T3 S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' ?+ F8 C2 Y$ w+ U7 XAugust, we said a credit shutdown was unlikely – we continue to hold that view.
, S& Z& `% U, j5 H- _$ [7 D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# W+ o6 x9 w' [! D/ Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: f# n ?3 S$ W' R% D' qA look at credit markets: r% z8 T! ^' g6 F
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 }" ^! k" S2 ?# a! ~# qSeptember. Non-financial investment grade is the new safe haven.
% r6 S; `8 }0 j. E9 F7 i g High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 X* U: c' N, I' q# C) {9 ^/ @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 |& R7 d' W5 G0 a( a7 w
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ e; g& [' i, i( S
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
y3 M- B# {/ f( }5 W% p3 BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 I. z+ L# C$ Y) o; t
positive for the year-do-date, including high yield.
$ Z* L3 A1 ]5 d% R' @& L Mortgages – There is no funding for new construction, but existing quality properties are having no trouble J. H% Z4 H' P; d" s3 p1 l
finding financing.
/ \$ d8 w) ^$ j4 W, R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) f% ?1 P6 @+ K# z2 F
were subsequently repriced and placed. In the fall, there will be more deals. s; Z: L) T; m) N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 O! d" \; C9 M# g3 V; Wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
- ]8 F4 {! U" e% m+ xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) F. G6 J( {( E3 u/ ]: {
bankruptcy, they already have debt financing in place.; Y" \2 p' j6 n& N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 o" r2 b: g. i# w3 h! ]$ u
today.9 T8 d% p3 p/ c/ ?1 r3 L* B1 h
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 W- F4 C- R' v1 V
emerging markets have no problem with funding. |
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