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发表于 2011-9-17 13:16
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Current situation
0 |3 r% B- o2 e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& \5 Y7 i) c I/ Z* K. w( cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 m3 F1 C2 g) ]1 y& w
impose liquidation values., _) J) A$ r4 E! d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 |! E7 W6 }, q/ K! B
August, we said a credit shutdown was unlikely – we continue to hold that view.3 b' \) @ f' w% w! h
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) z* J2 I/ L7 J$ ^- {8 y1 C, N
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 s, Q' e8 c/ |; `. m4 S
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A look at credit markets
, U3 ?3 f" z, _! G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ t2 q U [' Q* @; ~$ y# ^
September. Non-financial investment grade is the new safe haven.
/ N$ Y* P+ `3 J- q/ } High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 h4 w* b7 o( H# M& Tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ h8 P* C$ u" `% ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- n' S- [2 p2 ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# A& r# s) q; A) q l) E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# ~2 G' ]; b5 S9 X1 _6 b- A6 Spositive for the year-do-date, including high yield.2 p! s- i5 @: m: k* l, F# `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# ]+ L6 {8 c" I$ F1 `& F4 ufinding financing.
. f- g4 I6 i0 {# i9 s Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- y2 S- t7 _+ n% `0 r
were subsequently repriced and placed. In the fall, there will be more deals.- O9 K! G2 ?6 O2 }1 i
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% m0 N) P# r- |# d/ S1 A5 X8 ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! x+ z+ P+ u# Z& l$ g
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% b* n. D5 a3 n6 L
bankruptcy, they already have debt financing in place.+ z$ r6 c" ]& P. r/ z) z2 f, x
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 n% Y4 `* w9 M; t
today.
2 b6 F: \5 p* f; d Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 b7 V' G! _) {0 F6 d, U: a
emerging markets have no problem with funding. |
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