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发表于 2011-9-17 13:16
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Current situation
* ?6 n) {- {( w- `9 h5 P The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* M. {1 L" c' n. b5 V# \! N7 C
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ | E, n# {* E) ?: h8 yimpose liquidation values.
7 j o* A7 }) G J In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& z8 d, q- d' s7 D: u1 yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ T# Y( Y9 I8 H2 R* ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 M0 `5 \* v) x. y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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Q5 t/ ~+ I2 C4 Z( _. K' ?4 EA look at credit markets
( f, J: d5 T3 r: U Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: m6 ?( ?5 A9 b& xSeptember. Non-financial investment grade is the new safe haven.6 O) n7 F& P7 B+ D3 h0 J& a
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, q! x' U* o; `2 `4 z6 Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ z$ G6 G! ~% d- E @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- J! |! t* {: v7 Z+ d, h, taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
/ y" T5 n% F/ N! uCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ o% ]+ b* `5 Y) `/ fpositive for the year-do-date, including high yield.7 z1 a& ~; W) X: P# u: m9 W: n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 H9 G, t5 Y! l* n' D7 N4 v
finding financing.
G1 ^. h# q1 R( i% Y+ h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# x) h t/ }+ ?/ S( f+ u
were subsequently repriced and placed. In the fall, there will be more deals.
. ? z7 H: V* g4 [$ W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 I6 j; f' {+ P! ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 C. U; t* ^4 _# y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 i1 d4 O, b2 k5 Jbankruptcy, they already have debt financing in place.
+ e; V. z+ c7 Z7 T) [; [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 b- Z% _* k) Y+ l/ D4 }9 d' O4 y
today.$ F2 e, `: Z" Z
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: q0 `$ T$ z+ x* ?: t9 @
emerging markets have no problem with funding. |
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