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发表于 2011-9-17 13:16
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Current situation
7 k' T+ i3 t6 `9 o3 `! @- n3 Y/ q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( @3 B6 O) m4 c* Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ s% G) i: o! x( W3 W+ Jimpose liquidation values.
/ D8 h5 B5 I6 E: j5 P$ ]8 ^, \( M In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 _( f% F' A% R& W# E6 l. Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ \" Z+ u) y% F8 G The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: F# o2 S0 t3 f9 nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. p1 A; X [* {
5 a; Z( x# }0 |' z, Y( ]
A look at credit markets, z1 i" c0 [( u. Z7 C4 h" G( ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 d0 L3 F# l. f+ Z0 F+ LSeptember. Non-financial investment grade is the new safe haven.
% v) O/ B. s+ ?0 V2 c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% r0 X; {* D" P R& u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 T( H) ]- J3 f
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: y( ?; z, R }+ P: v% Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! r; F$ K5 ^% d4 _: O$ h& v
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 I- ?( ~- t$ G. M+ i7 O
positive for the year-do-date, including high yield.& \7 u( e+ X1 x) y. S
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ t) }/ P# |- }* X
finding financing.
7 q2 N1 [4 z- |& l. z' w5 } ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# k% ]& G$ g# z! B0 {were subsequently repriced and placed. In the fall, there will be more deals.7 D# J5 `& r9 Y* _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ O' \& O0 Y( H" w; Yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were F+ N6 O) ?- I* u
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for e9 C% j, e* ~1 {5 E* B
bankruptcy, they already have debt financing in place.7 k1 p/ O) f$ k% \* K
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' ~' J0 J! i4 w( ptoday.
( |0 ` ]! y$ b: T& }6 { Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 G( c, j* J7 ^( y. X0 k" \+ J
emerging markets have no problem with funding. |
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