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发表于 2011-9-17 13:16
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Current situation
) H t e$ f" q' Q& w, J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
, ~! }5 I: c5 r9 {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 V2 n4 g' ?' Y+ v9 z+ |6 G* ?
impose liquidation values.; h k8 z2 }4 [) P* n
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( |% F6 I; d9 v; F2 ^# BAugust, we said a credit shutdown was unlikely – we continue to hold that view./ ~* u: A7 `. n
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* h; t& ]! R" E+ [4 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 N$ a: X6 V7 \& H A
1 n0 A- h1 ~% V& {( G' U; I! X/ y/ uA look at credit markets! I4 C5 h' h/ p$ `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 k0 o( p1 n0 b3 ^
September. Non-financial investment grade is the new safe haven.
/ T0 [( s$ k) Q! B/ @- E( \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 D9 P9 W7 H# O3 Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' |6 q; W/ H$ t8 C6 c2 `" v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have w4 ^: O2 ^5 Z) V; E( |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 d0 e4 P4 m4 bCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 X. l. |) G6 a
positive for the year-do-date, including high yield.
# w# p( S# G; I% R: G) d; h4 m* Y$ H Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# P# c4 L F/ A- Y+ P% x( I* ifinding financing.
8 ?5 p. v$ U- B3 x; T1 h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ g- Y! k2 ?+ W$ F# P" V. ~3 d
were subsequently repriced and placed. In the fall, there will be more deals.
" E" |( `. U5 F' m* k- P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and8 |) ] f) Q# N. S# w$ _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* \% T, |( m9 X& ]0 m/ }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& e5 A7 B! D- y( G) ]" L
bankruptcy, they already have debt financing in place.
, J) p) @& ^& V4 W! g' N, t European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& U0 n2 Y0 n# g" `2 T) X4 ~- b
today.1 g; m; X y. y% I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 G4 ~$ X/ Q2 D: a5 V& e" B' h
emerging markets have no problem with funding. |
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