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发表于 2011-9-17 13:16
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Current situation
4 {0 ~+ G5 d4 | The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& _: s" K S% J ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 L/ h5 G: j) q$ ?
impose liquidation values.
! f0 |. h, k1 I6 B# p, i/ L In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. A, u: z) o3 ]$ Q. W; ~/ vAugust, we said a credit shutdown was unlikely – we continue to hold that view.$ q; U% v! v) j
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' t' q. h: ~ |1 n8 \* e; o2 Z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: H$ C: n9 f% @/ ~+ l9 Z/ W
. @+ f `4 P6 ?: p4 j( NA look at credit markets, x! s+ X# G4 @+ f2 B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- _& N9 g2 }% Z, ~: c0 q8 F) p* }September. Non-financial investment grade is the new safe haven.
+ W) g6 i8 f# P, `) R+ M High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ t. p0 Z' ]* B) o# v4 I0 Y5 V, Cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) o4 U. A+ U7 W: n8 S8 _' o2 R. y, ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 e: ~5 D, U0 {" C+ Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 N) } {1 w) z4 n. G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" L1 ]2 @( T8 a8 I5 c& O4 npositive for the year-do-date, including high yield.+ x" P$ J+ e5 O! O# s$ m' z7 F
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) {$ `- m* I2 w& k$ o v! O0 wfinding financing.
j1 x0 f$ t$ Q8 I Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) }) i! N) o: F3 `( cwere subsequently repriced and placed. In the fall, there will be more deals.+ P9 z2 a+ i2 E) C" |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) G& F8 W$ j+ Q+ @4 e, }) r! J: K
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were4 |: Y2 }7 ~* O( b
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( L$ Q$ w5 f) v- h' I3 k, r9 Zbankruptcy, they already have debt financing in place.
# y$ \! o, B } European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) p s+ u& r! G. H- n' c
today.
9 z: h1 p/ _+ O$ v) r Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
% }$ ]+ y2 [ L) |+ o: demerging markets have no problem with funding. |
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