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发表于 2011-9-17 13:16
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Current situation
: o0 J- h( e+ |3 C. U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# d L3 ?9 \0 w2 J6 t% z! Z* b" ]* b2 e
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 T. o1 R P- F9 D6 K3 Q3 `
impose liquidation values.* P6 A$ k; ^4 [+ V) W3 v8 U8 }
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In" S6 N* l, H8 R1 Y- q9 A
August, we said a credit shutdown was unlikely – we continue to hold that view.+ C; I: O: t7 }# R& P1 B1 T/ c6 e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 r# w0 f1 K" | t+ xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
* f W- R, }# ^* V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ g4 s0 _& v3 N
September. Non-financial investment grade is the new safe haven.
0 K' [" R( x3 u. G2 \) {: b* } High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% L i* Q( s* l9 }4 k7 Y3 G& B
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ Z% P. I' F8 m. H
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 X5 o0 k8 p: y+ `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 h0 I% W7 ^3 o# X+ u* F& P
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' ~; v- C* h, s+ k. }
positive for the year-do-date, including high yield.4 ^9 B$ N+ `3 V7 {& B( @* x4 K$ t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ ^ B: u) v- s' G9 Jfinding financing.
; b9 Y4 u4 p5 T N+ ~+ v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they _* g1 N0 J- |8 K0 O1 o% e' e
were subsequently repriced and placed. In the fall, there will be more deals.* F5 w2 |' f* |/ d8 R L G0 Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and8 }7 p1 D6 D$ {* J) }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ U( l( y: W0 F
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# y, b! W) N1 t: Q! A; t
bankruptcy, they already have debt financing in place.
* e- q) \. @! W; v0 Y; A# c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. }$ f6 [- a" a+ ?
today.% e4 S9 x& H4 G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 w+ w- d2 x% B4 ^+ J: c7 Q7 b
emerging markets have no problem with funding. |
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