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发表于 2011-9-17 13:16
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Current situation
: |$ \+ I4 n. E+ i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- p+ D: `0 a4 s- _" j0 A& yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( w& U* Y2 }2 |2 r: ]impose liquidation values./ ?2 }2 O/ t( z/ t- s' i
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, M7 l% q) K1 t3 O9 g4 O( F
August, we said a credit shutdown was unlikely – we continue to hold that view.
% h4 ^$ X# W! i- u9 A The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 q* |- c! ^- G7 `scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# e: u3 ^; n( K5 h1 CA look at credit markets
% p2 w. k0 q$ z5 c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 g" J' H+ e* v- Y2 \8 ^: {7 c
September. Non-financial investment grade is the new safe haven.
1 v4 _6 E$ n7 |" h3 [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! I/ K; [7 k! r' y- W
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" o5 ` G; z( M. H7 J4 r% \* ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, O9 Z" ^% C2 r9 ?2 o7 @
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' F( E/ c6 m/ U6 j6 FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 S1 g" e& H8 O/ | T0 Y) Apositive for the year-do-date, including high yield.
! b% a" a; r) s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 Y2 B. I5 i6 J: e. H
finding financing.. _% k) y6 U& J/ @1 x6 ~' [
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, ], Z6 h7 [/ l; ^
were subsequently repriced and placed. In the fall, there will be more deals.
# y0 s4 W4 {4 t2 {* k6 ~( _' \5 g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 b2 E M7 p$ @: O$ D8 l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* @) p3 W) |( r/ l$ j5 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ F% d# A! d% `4 o }bankruptcy, they already have debt financing in place.8 D' Z3 Z: r- }) U6 y( f
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( A; ~4 Y2 P! b! \1 w( Q+ h6 V+ n
today.4 L# W3 p$ E- f5 @( p/ b9 Z* x
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: _ v' @/ Z$ n7 i" d$ ^
emerging markets have no problem with funding. |
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