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发表于 2011-9-17 13:16
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Current situation
. @6 f/ o" ` h+ x The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 g( W: S7 h$ ?' p2 @as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 G' Y. Z- v) ~0 j
impose liquidation values.
* y, s/ q1 { {- S) R* n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# j9 |" x$ v8 S5 W5 f" r; ?( m3 U
August, we said a credit shutdown was unlikely – we continue to hold that view. i, h" m- l) {: J3 [' {; \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 w4 C3 x+ g' Sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. U# e% i0 N) G2 A" h2 @
+ Y- u0 ?" L( X3 m( S6 C
A look at credit markets
; T7 j6 h \( ?6 Q5 B Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 g9 H# l' b$ C4 e
September. Non-financial investment grade is the new safe haven.
* L: N+ R+ C7 o2 J$ A+ e High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. b' S" e! K: J# Y% b l* w) v- fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 X( |% ^% _! ?4 O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 s' j* ~+ C/ F. G% @; w# N
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) \; y1 q" m$ N S2 @( iCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! x6 U n6 S, n* C3 ]( z
positive for the year-do-date, including high yield.
0 e( S5 c2 l2 q4 A+ X% R Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% M1 z4 ]2 W0 K0 ~: M
finding financing. j1 D) R) x) ^2 j& s' C3 }2 z! |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 k0 N8 E( |7 ^3 N' Hwere subsequently repriced and placed. In the fall, there will be more deals.% r, {6 g6 l' T4 P& K/ Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) S) o$ a( ~% @7 W. y2 o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
_ o! q* g1 x( n2 r7 N) K0 cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- X# Q0 f1 [4 _% Sbankruptcy, they already have debt financing in place.
. }. h4 n3 u% B7 H' f* D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 @ M. V+ c+ u7 `: @2 v/ B" y
today.
9 s F, K8 G" R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 o+ B# V% u; C; k+ `: O9 O; t
emerging markets have no problem with funding. |
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