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发表于 2011-9-17 13:16
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Current situation
* Q8 \0 l6 B4 J' ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: N6 v2 _3 m5 M, H( ]3 M: @0 Nas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 l7 W, Y+ Q6 P( K, t
impose liquidation values.. V/ U# k6 ^2 |8 e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ x' I+ w6 j+ P. c5 A
August, we said a credit shutdown was unlikely – we continue to hold that view.5 {1 k+ @$ T8 D2 r' h. E$ B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) D* }, Q9 N+ M* v2 S
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 X% v" L# M% e6 _! f4 K3 y* [5 C
5 ?$ X% R8 a8 `/ B$ j" TA look at credit markets2 ]( N5 u: Q2 i: j' B, r k- `
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 F& K: ^* Z$ p* k: w1 ?
September. Non-financial investment grade is the new safe haven.
1 o8 U. t8 D" H& y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- I% A' t9 `) athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' ?0 I5 l2 z0 [% ~9 a5 O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* p- _% Y# S+ Y. Q# V }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 p: H8 J6 g u" {, x. M# @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ t8 O2 n6 C: Y/ s1 n( [" a! [positive for the year-do-date, including high yield.
+ z, a/ A3 [3 _' t6 S, E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 [2 F7 Q4 L3 Yfinding financing.
. @. m. b. F; C" U( A" v6 d Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 a% V0 ~/ T, v L# w
were subsequently repriced and placed. In the fall, there will be more deals.0 q6 A! _, A* @: j
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' c; K. \) E* I" h
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ A3 e0 t3 z8 N$ k7 W; F+ T
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 J9 D* W7 N# X* a* nbankruptcy, they already have debt financing in place.
9 c4 h. l1 z" @$ d European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( f; e8 n1 z% w
today./ r9 O6 s6 B h1 @/ J: c$ h" m
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- s/ G1 Q0 Y3 p" w$ p5 V
emerging markets have no problem with funding. |
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