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发表于 2011-9-17 13:16
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Current situation
! E; n9 q" u/ @& E- X6 W9 z2 P2 x6 l$ b The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long+ X$ f5 s) q; t8 `* Q1 L$ j6 V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& w2 S& m9 ~% _( U; n6 C7 {impose liquidation values.
: n* I; S0 p3 d, A1 A( A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 I( d# ^3 f4 P/ u( d5 h' \
August, we said a credit shutdown was unlikely – we continue to hold that view.
$ n1 u; s5 p! ?# P) D& l( K! d# [ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. i) \: @3 Z" j- I& P- j$ B) R. F+ t; v
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., H/ v0 R, B, w7 O# l8 d
+ y9 d8 Q7 Q: g6 \& L" C
A look at credit markets
/ P/ P/ @, @6 p* t! h" G) ]' c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% ~0 y7 V) x M/ f+ }3 y! n. }September. Non-financial investment grade is the new safe haven.
$ n3 \3 Z; W; |7 n3 K High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( M0 P2 I! p8 h& i7 s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, j' f. h" g; L1 v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 \* i! ^+ l" O* ^. P. b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 S) J; x8 A% t. _1 g8 H; U2 nCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 X7 V5 B/ }4 s# W! }6 Hpositive for the year-do-date, including high yield.% }# T/ G+ l' ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' Y/ ~+ C5 [' }% `* x l5 H+ L
finding financing.+ Y$ Z; q/ b7 s% f5 I( w+ `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 e3 N; l; U. dwere subsequently repriced and placed. In the fall, there will be more deals.
- c8 F3 C( Q. ?% ?! E0 v8 ~9 B Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 i: R( K4 F# C& R% dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% W5 `( v1 u% Q- y2 V6 [
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ I2 f# \& }% H" Y2 ~) ?/ z" ?2 X
bankruptcy, they already have debt financing in place.
8 r/ b6 j' T5 [* f% j* | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
7 q' ?& |! ^/ Btoday.
' l" m" |! F2 a! ?1 M7 o% e$ y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 j0 S. ]$ N% n0 ^3 G; w1 D7 a" P2 k+ Kemerging markets have no problem with funding. |
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