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发表于 2011-9-17 13:16
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Current situation
1 w# `* ~+ w9 C1 J: P The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ y3 X& R' L! Z0 [+ S
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; b) f7 j: t( f2 B% E6 q: \
impose liquidation values.
% X+ ?% v2 y- w* H# D In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ d: a5 n$ Q- B, C; H
August, we said a credit shutdown was unlikely – we continue to hold that view.
- \, T+ H" w y7 N! [ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 W8 @/ z' Z% x _+ G5 I: F4 rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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, L: P6 r3 `9 NA look at credit markets
2 A# z; W4 n' {# ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 y4 W+ C9 @5 R# ~1 A) ]September. Non-financial investment grade is the new safe haven.+ V8 _' G; j- W0 D) b7 `4 P' ?9 L
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, S# d- X3 e8 R: U& P6 Z5 @$ ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ W/ n8 K& A! N& A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 A' F- s3 {( Y( p, ]! m# [; E
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! L/ ~+ n0 Y8 q) f0 t0 f8 ]
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 E" l# I, v0 U, r$ I, e" z2 gpositive for the year-do-date, including high yield.
6 V! d/ |4 `2 K4 P: m: E+ z! t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* @0 d4 p" C; Q+ S6 E
finding financing.
J0 c+ p9 a: a* W. y! `( E1 _! ?2 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ v0 p! [! V0 S% T
were subsequently repriced and placed. In the fall, there will be more deals.6 ^" ~6 k4 v% n% n0 ~& r' \* L3 l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 w0 p$ L3 F D* ]% ~5 ?8 d- Eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" J9 r* {3 B+ n; U, K0 w7 Y& X$ Y, F/ J Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& U1 C% J& l" d. D
bankruptcy, they already have debt financing in place.$ c: e8 A" e- s: s) ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
h9 u1 {- H6 i& {$ }today.
: G* r9 d0 S4 f' U+ o Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' H2 G( S6 E3 Q; lemerging markets have no problem with funding. |
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