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发表于 2011-9-17 13:16
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Current situation
: A- `4 N1 r4 `& Y' G' h- f The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 ]& i; n) Q, v# j( y* das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 V4 K! r+ [. d- b% ^
impose liquidation values.5 |6 X- a& L6 H5 ^5 l+ W
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( k4 x, h/ S! Y/ U; f' O( o
August, we said a credit shutdown was unlikely – we continue to hold that view.7 [* g$ I* h3 n. J+ ?% h; _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 u$ h) q+ `2 O) }; B
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) o1 P) k2 V; U# F
! {" q7 {5 J" K; O$ A+ l: RA look at credit markets
* {# w) r% ]5 D9 c: J' F e/ X; f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 e: q" j$ D6 O1 I" O N+ GSeptember. Non-financial investment grade is the new safe haven.
1 R- M$ K1 w7 e5 S( l8 E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& J* a# b0 }2 w; o$ P# j; }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 `; O$ K6 Y9 z/ Y9 O1 `
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 s4 X8 L3 q- [8 {access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 L* ~ K% U) f/ K5 l0 V2 E) p! j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 H2 Y6 r4 H) \2 {# g+ V6 Ipositive for the year-do-date, including high yield.; N7 B) D; P9 L) L$ t/ e$ v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% \4 v* T- x" p3 [! P. A/ s+ [
finding financing.8 [& a( J7 h0 u& x2 [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 T# x2 H5 z4 z6 Y! C, d
were subsequently repriced and placed. In the fall, there will be more deals.$ g6 o3 e( F3 h( u: b* f
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# ]) v+ f0 R! {9 v+ nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ g2 l% M" I u/ H; E
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& b& x( L0 F5 o2 |" k' s0 d$ ~7 ~bankruptcy, they already have debt financing in place.$ b* q2 Z6 {/ A S- l
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( i/ x$ j, }. ^7 N7 X9 Y/ M6 A
today." _- N+ m2 E: A, t$ g7 g! F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 u6 V3 ] B9 y2 \5 n9 Q7 X! Zemerging markets have no problem with funding. |
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