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发表于 2011-9-17 13:16
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Current situation7 _$ q' }* y5 q1 A6 e% C
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 ?9 `& N# S7 R+ K2 Q) X& P n
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
0 m8 o2 f5 K$ i3 u" wimpose liquidation values.
2 q' G6 B+ u; O# x( ~1 m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 j6 Q: _3 U9 n% A2 M) s
August, we said a credit shutdown was unlikely – we continue to hold that view.
# _: T* R: H+ w8 l! ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 I# }; I* h6 [& d" Bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 A M, `; ]0 T* t" J) P+ Y0 u
# w1 H$ g+ D0 y; Z# z$ P9 GA look at credit markets
9 J4 w: S T" Z4 M8 N- ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
+ p# B( \, @! j/ mSeptember. Non-financial investment grade is the new safe haven.$ b5 D8 y2 L) l) A* A5 k4 U' {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; y4 Z' x; [% K" ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) [: m$ P. ?$ B3 v4 S8 j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& h1 n& o3 |: ]6 f# h: Y0 S' P3 ?access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( E/ B5 Z0 M/ k$ d7 m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 M6 N+ n7 I! B2 ?- W) j7 s/ {
positive for the year-do-date, including high yield.# `# A; L! `2 }3 W) F, X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ H0 M" I5 T, Q' ^1 h/ J
finding financing.3 B# q& P' }- \' L4 a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, H" y, q; k( q" E' j7 _
were subsequently repriced and placed. In the fall, there will be more deals.. z; v& {# |+ A: J" q% R% [, g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- m# ?3 z% m7 b
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# G" X6 o5 n- n4 Y) Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, N8 }" O u$ s7 s1 V& N
bankruptcy, they already have debt financing in place.
8 A3 A2 c" R, Q! m, @4 N' P. ~ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain i j' r/ G: [3 {5 F0 J/ {
today.
- F9 F; R* F6 g9 G3 A& G* c9 Q/ ]3 B2 X0 k Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( _5 i' g8 {4 v& h+ P- V- c
emerging markets have no problem with funding. |
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