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发表于 2011-9-17 13:16
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Current situation
) A0 q O: ^/ l& g( r3 h; i/ p5 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 c" g9 Q; Q }# C' q3 _as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 r% z! X# B w4 ]4 ~impose liquidation values.
3 E8 U) l) R3 T5 a7 M In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! B1 L3 H+ K) t/ A( r4 P, S2 l
August, we said a credit shutdown was unlikely – we continue to hold that view.0 G3 x9 c) Q: G: x
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' H+ T2 W+ N1 F2 @/ a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." A. D+ t, Z# y, @8 H5 U, \1 N
: W! H, O6 v0 w* O" f1 x* h/ KA look at credit markets% u8 ~6 Z- ~# v0 i; i2 X" X* t1 X$ g
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! h" h& \% u3 |. T, f7 m' M# ~% ]" OSeptember. Non-financial investment grade is the new safe haven.+ d0 c7 ]' l N- F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) p5 ~1 v& G1 }9 O0 Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% y4 p* n' w/ L5 L' ~# hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, j- ?9 c4 u- J. d3 Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 u! t; M. W, y' C; G/ X* lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) \9 u2 ^9 V# w* _0 Xpositive for the year-do-date, including high yield.
0 I8 X: V+ o$ f( E1 P2 N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 V; Q5 e! y/ c' |& Tfinding financing.
8 @$ R \! Y) D7 j4 Q Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* q# T! q) \4 \/ S+ Y. }+ F; n4 Awere subsequently repriced and placed. In the fall, there will be more deals.
# \ t- `- ^. i: e Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ h& B' z" [. P: |. E
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 j4 L% b1 X9 B& Y7 p6 O9 Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 g& f8 K, @( O: G" S- E/ Xbankruptcy, they already have debt financing in place.
1 q" r( M: S' c# r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 B: ~, } e5 s* h6 ztoday.9 Z" _4 A; O0 h/ c2 ]
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
Y9 B9 v4 S. E0 [emerging markets have no problem with funding. |
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