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发表于 2011-9-17 13:16
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Current situation
{5 r; }/ d9 M, m$ ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 ~) L/ s# G) y, t" I5 K$ }: y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# c! p2 z* p% z: r
impose liquidation values.. p- y; x) t. f
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: X9 b" t5 g C
August, we said a credit shutdown was unlikely – we continue to hold that view.
L6 s7 ^2 v( j) r The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. I0 n8 c& n# x4 \7 w, r' z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( Y$ V9 _3 g, h0 m
# q+ c6 f2 g4 b5 V% i
A look at credit markets
' a3 g* P! n R% c d Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. e$ x$ ]! J! s0 O) F( y- zSeptember. Non-financial investment grade is the new safe haven.
! m( U: b& V J" ^6 v! X* \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- |. e- E) t8 E" H6 X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- U! F4 O+ l( Z/ e( I- U9 H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* z8 A1 q _* c+ u/ c( ? naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 v6 T0 N/ X( w5 Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 M- A* V8 G8 e3 qpositive for the year-do-date, including high yield., @! l, N; Y7 W" \4 Q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# ^$ h/ j1 [; q) o4 l3 k) g" gfinding financing.
: D* a7 S9 x4 D+ o Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ M* ~$ e( Q- ]* T$ h, ]& i
were subsequently repriced and placed. In the fall, there will be more deals.
! u! L& W Z" I* y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" e( M5 c( F5 J! ^6 L$ G# g! Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 C' N) [# \. ^9 g! k H
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 D5 H0 e* o5 m
bankruptcy, they already have debt financing in place.% N+ h' e/ L/ M! ^* y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ T) _* `0 U/ m0 S" C
today.
! @ S0 x1 v$ x# c1 v) ^ E1 V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 y5 P4 D+ }) _9 B3 _% r' @emerging markets have no problem with funding. |
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