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发表于 2011-9-17 13:16
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Current situation3 U! \: n' O3 i/ H' N( p5 d# M
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- i: M$ v% j( pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& c9 h5 d& q: |( Fimpose liquidation values.4 _6 s# `7 K: `& |8 S4 w
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& C! C G8 n- l) XAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* f. d: G/ x% R/ D. K' P5 [2 ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) l# }3 f4 c e/ g+ S; \: tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* c" `4 m4 H% U1 ~ I% l
( q1 O5 `+ V8 Z! DA look at credit markets
7 u! ^% i* T& c- n/ }+ H, ^3 S K+ J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 w4 T$ m1 e5 O; c& y7 R$ C
September. Non-financial investment grade is the new safe haven.& M) k6 `( G6 _# x1 O0 _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# I' s+ A% ~6 {2 o! I0 H, U6 a3 p% b
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 n# ^ t- Y, l( Q1 l E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ a9 b, ^' \1 o( l* j
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade ]& T/ V4 }" z3 n* E8 Y* ^$ @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ [; V; Y6 x! T; F
positive for the year-do-date, including high yield.( G* e! H6 H- Y! c' i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& Z [ ^7 ~6 w; B) I# K
finding financing.* L1 q. H! b' e4 z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 T" r; Q" L1 ~2 N$ O* k: s# T
were subsequently repriced and placed. In the fall, there will be more deals.
: U) y% _# k3 D8 G1 x: c# E4 o Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 n0 d0 S+ X) o- r4 g6 S& E0 tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 c* v( j0 v8 dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' u6 Z7 B, m, x( C5 H* t
bankruptcy, they already have debt financing in place.. ?7 p j m8 M+ P/ _6 }( s0 i
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) R: \5 }" r+ z r/ G5 x5 m5 {8 htoday.9 @9 f$ K/ I! \
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 d: Q( Y" ^, y; B/ M
emerging markets have no problem with funding. |
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