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发表于 2011-9-17 13:16
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Current situation
& |, ?. S4 e: x( f% H+ u3 X' _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; j; v+ W* N2 k( K
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: L1 ~' N: R* J8 V7 C9 |
impose liquidation values.% \8 C9 K! T% g5 ?# a! ]+ }) p
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 C ]3 s! F3 P/ k9 WAugust, we said a credit shutdown was unlikely – we continue to hold that view.: h2 g8 y. _4 l6 _2 _, r
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 f# N- E* K& Z4 m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& ?* n& O' l5 i# j/ RA look at credit markets" Z1 ]( z# G+ [1 _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, V7 M. Z- B: ]1 U V$ x' I
September. Non-financial investment grade is the new safe haven.
% \, u$ G% v# O$ q0 V) ^8 r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 a* z5 B, `8 ~$ `; Z/ p
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& ~6 z. V$ I# O; X7 _3 J$ abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* Z. y G# j! U% b9 Q3 t+ K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 X. A% C2 Y0 m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! d. j% R8 r4 S0 R E' bpositive for the year-do-date, including high yield., T, J+ ]9 ]- }6 k
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# Z: z6 N( w* L: X0 Hfinding financing.3 ]. P& K9 [3 U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
3 C, M( w" I; O. d, [1 swere subsequently repriced and placed. In the fall, there will be more deals.5 g0 {4 J% R, \& e, L: |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- [6 y1 [: x* r6 z9 l! p1 B
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( p& S# V" M, h: |$ q4 _" i; J
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ E% b, \3 Q8 L4 t1 B7 x3 R; Y1 nbankruptcy, they already have debt financing in place.
0 R' E% Y3 W3 l% h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 n; v2 a# K/ z
today.
8 _! G/ K( W% r9 e' x, y! a/ V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 A6 S7 r- J+ j" r7 ], ^emerging markets have no problem with funding. |
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