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发表于 2011-9-17 13:16
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Current situation
1 \, R( V, k" t, r$ \. q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ d4 ?2 ?% N& @) |as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- z/ x/ {9 @3 h0 rimpose liquidation values.5 K/ P: l( j- {# y9 |9 H+ ?, _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# Y% d$ x/ H1 N H) x% oAugust, we said a credit shutdown was unlikely – we continue to hold that view.& @9 L4 Y+ Q! ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ q [; |8 ]+ u; G' Q+ G3 ^; A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 A- i# W" c; e' R9 ^" ^, P
4 L/ k' ^! E: Y' o0 z% I+ G# y% P2 o3 zA look at credit markets0 K$ }' _+ M5 b/ X9 j
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) S8 t: \3 N8 N; F/ w* dSeptember. Non-financial investment grade is the new safe haven.# M) m6 ]; w/ G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
D4 @$ y# ~' c" [9 `! h) P; vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& M7 n2 i7 s6 Y$ \; H8 [% i
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 G; n% a/ r2 {& Aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 A% `/ D4 d. I( m) ?# r: G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 c/ ?: x6 Z# ~) `. O4 D$ `2 ^
positive for the year-do-date, including high yield.
; A2 z B/ }4 H: U( Y9 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ _ e( \6 [6 R# a
finding financing.
' u) B5 w) T- e) l Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 \# x9 O0 h: {5 X( ~
were subsequently repriced and placed. In the fall, there will be more deals.6 x. c0 S) u7 @7 j' z8 \
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ y' D6 c3 Q+ A6 Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 e/ `. P0 x4 v/ l. o0 ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 b4 A+ b, b' v& y
bankruptcy, they already have debt financing in place.
6 B6 {6 e/ h6 [/ ~& @ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 D, @. D0 |$ x& _+ A
today.
' Q& r0 I1 R( H" y" Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ z: ~& _9 ~$ B$ U3 R6 g0 Y
emerging markets have no problem with funding. |
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