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发表于 2011-9-17 13:16
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Current situation
! H4 W+ o' Q1 Z1 J# \0 A; L The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 W! D* U% J/ Uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' J3 k" G- S! g3 x' S
impose liquidation values.3 a2 X k* `7 X* K! h6 n: a
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' ~/ y, z. { W9 o
August, we said a credit shutdown was unlikely – we continue to hold that view.8 n/ l, \/ m' I8 V6 Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ C5 {; v3 V# A0 S, A* l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 a) }" i" _' u0 ^- b
& s9 U0 ^. Q# m- R$ KA look at credit markets; Q" c$ M3 Y2 u+ x+ e& {+ N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 `" d2 P( M, a4 hSeptember. Non-financial investment grade is the new safe haven.( d3 Q+ P6 Y5 V4 U
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
A4 }. z$ X& ~. A: c" Z8 } |0 n) Cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# g; t7 U3 w0 [( W2 `' ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 V' G9 t+ k5 E: _
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. K5 \+ X( C7 O( l* A6 R( BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 `4 C9 s, f, b6 {positive for the year-do-date, including high yield.
2 ]) H+ i0 @/ f, K# P Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 A1 [/ `2 p' \/ Z+ [2 efinding financing.
; P: p9 f/ P j Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( V* Q* r5 }% t a4 U+ N. U' ^were subsequently repriced and placed. In the fall, there will be more deals.# N; C! D& s+ X4 h* N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 F, R6 @8 f& p# \. Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; @% l/ c3 X! V$ W0 T4 t
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for c, f# @# r4 H, ~9 I: o1 M( `6 i
bankruptcy, they already have debt financing in place.
) R" D0 @7 B- F2 i$ _* g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: X t4 c6 t, @. V7 @$ }
today.
( U* i5 d4 e) t0 d' U' I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 S* s/ D' g l1 M" B. a" v5 v/ qemerging markets have no problem with funding. |
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