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发表于 2011-9-17 13:16
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Current situation& x( n0 l& g& O7 R' p
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long I3 V: X; R' o- g
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: z- n' I e9 d. t4 aimpose liquidation values.
/ U- H) {6 [ p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' |+ L- S& O! Z5 r" G4 |August, we said a credit shutdown was unlikely – we continue to hold that view.
' G0 `9 g- K7 E+ s! F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 |8 ^) s, T+ M& Bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 S/ d3 Y* H; O
1 ~3 P7 M Y& S Q* R/ s& j- \# M
A look at credit markets; g; _" a. B$ s- [. l9 W
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# @; M0 r$ n+ u. j
September. Non-financial investment grade is the new safe haven.5 h% A# o( V& ~* o6 _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, R2 E. x' {% e1 ?% L, e bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
Z* u% W9 }& Wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 q9 H4 L3 o8 T/ u! R1 x: Q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( ^+ Y( h6 q* G B: V6 S
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ t: c) ^) W0 J: j# A9 ~positive for the year-do-date, including high yield.) ^% \, H- ]) F/ J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" E& a T3 t5 I9 K) Z5 dfinding financing. E! v3 K: }$ m/ v' T
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 C3 R: k& w( t/ U7 uwere subsequently repriced and placed. In the fall, there will be more deals.! L- A0 S, ] v$ x6 W3 x x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* t/ h) o; B; L8 c+ f/ {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 o" Z2 j) D9 g; u; c3 W3 Q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for ^0 @3 [. U7 m% c# d- D
bankruptcy, they already have debt financing in place.
, M/ c; [) Z/ o; j1 p: u1 l! l* _( q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- t4 ^, P: ^; F% U' G( rtoday.
) a$ W9 q# ]0 D( n Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 {* A1 q9 m: Q2 u- g \/ ?emerging markets have no problem with funding. |
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