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发表于 2011-9-17 13:16
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Current situation
: f/ l8 p' E: W& J' z0 F The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 X2 Y$ e! C4 b( W7 g9 U; b3 Yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) L: X% f# `: A/ {impose liquidation values.
% x' d( p- A. m+ j0 A( b& Z) U In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) O- O( [( Z3 t* Z5 c8 J) N( f
August, we said a credit shutdown was unlikely – we continue to hold that view.% U# ]: i2 \2 }
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; t; }) h d! t$ y9 E( j! `- Oscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ G( I0 D9 O# _, g- w: v# @0 d" v
; l- \8 w! E; TA look at credit markets' m" d" ~1 M- n, j1 }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" l! ^! K* n5 e R" h1 v2 p n
September. Non-financial investment grade is the new safe haven.
" |( d# F' q7 s. k) d4 ?" o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" _$ }( F$ w" H) t A' y- _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. R# h% p" ?" Y' g- H- E. N0 m+ bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ I% \ o- l6 v" ?. F
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 m/ k, U7 Q: m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 _: E; d% T3 M) X- {positive for the year-do-date, including high yield.
# q2 O+ z3 `5 b8 U( ~ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& c+ t# M: I/ Y4 ~ P, _8 U
finding financing.
. F; h5 \ ?/ ?0 W3 u) @% p! U$ u9 z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) c( i+ Y( ]1 D; ^were subsequently repriced and placed. In the fall, there will be more deals.
+ e7 L, g0 }4 K( O Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ R" R% w! T4 e2 k' }( l& g2 c0 D5 Z& [
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ ~. h% r+ \: Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 d, F t( m( D+ s9 f7 q3 y
bankruptcy, they already have debt financing in place.
5 X# x$ U& q p4 O6 r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 }7 ]. v8 H( \. ?today.- G0 ^3 R, e. P( F" L
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ `6 D: R0 b6 t/ f; V5 ~
emerging markets have no problem with funding. |
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