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发表于 2011-9-17 13:16
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Current situation" Q9 M: T7 W; Z: K
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ A- X& A- [4 D/ s7 h V! ]( |as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# ~ K5 P6 x" \, v# A! f- Z' I
impose liquidation values.
0 k$ p& }9 G9 U" x% w( L: J1 I In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; X9 @6 R' [; F5 mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: J/ c) o- K+ W% e) {8 D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% f! X3 t6 h: ~. c6 Z" j5 i
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
0 G) o) M9 Q X9 A% x Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ z/ j ]' z( `* A8 d, p3 S( oSeptember. Non-financial investment grade is the new safe haven.! S: p0 z1 y" _5 x/ ?! r8 X- H2 K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" Z* ?+ t; U. Q# A7 @$ u
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% B$ Q. G7 A' U5 j6 Z* I+ S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) \9 n$ \8 o3 c2 Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; L w b B4 t5 u+ `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: { E5 [$ U* g9 W7 K
positive for the year-do-date, including high yield.$ Z2 Y3 `# d( @3 t& {8 p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ V( X/ j1 d, r3 w+ B# ]finding financing.5 t" c- |3 ?6 a5 r' B: V+ {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) _- o- _' B) ^% ]1 t: O. L
were subsequently repriced and placed. In the fall, there will be more deals.5 [* d# F5 \) q1 a9 |/ n
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 z" Y( q( p0 O& M/ c
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
T# s0 i( h9 S% Z1 e: Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' F5 ^0 ~7 ^6 J( A% C2 h. E ]! S9 Ubankruptcy, they already have debt financing in place.- d% a! R3 @# p0 r( r
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
X. j4 y4 s7 \. itoday.8 F+ r- Z2 [9 h0 w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 s. n0 k! E" Z3 V k" f$ p
emerging markets have no problem with funding. |
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