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发表于 2011-9-17 13:16
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Current situation
4 T% F Q7 o- E0 H" b The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 Q I. z3 |5 g% w% a4 q; Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% W- Y- d4 T' q6 [) _# L. \1 Cimpose liquidation values.( ~8 p( s/ K5 a: m
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In ? z6 j! ]7 M% K
August, we said a credit shutdown was unlikely – we continue to hold that view.! w" `8 H9 n4 X3 F; ~( d' \) Z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 ^, b4 o! q! H/ ], M2 ~
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: M1 B8 c: H$ s: V+ ~0 S% w
P1 Q5 f# S1 o: M
A look at credit markets
8 C5 i' `2 B0 a: L+ I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
?% J: U$ m; S" @& `4 z, L `September. Non-financial investment grade is the new safe haven.: z9 M3 d/ W: P# k+ {
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( h+ [& I/ U' C' t: sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; G7 ?0 K9 [1 \2 }; N5 ~4 v( Fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ @) P+ z" K& q- I
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 v: I2 }# `2 L: |2 K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 R# E; Y; e) b1 e
positive for the year-do-date, including high yield.
% M9 ^5 i2 J' |- _ ]! b/ Y2 _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) i) F) C( [$ {finding financing.6 w( l& Y8 R8 w: u4 W; q7 a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" m# U6 q) X* F8 D5 u. u- f
were subsequently repriced and placed. In the fall, there will be more deals.# Z; T$ ~/ B7 b2 N3 P, b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ h: U9 Y4 P" d& e
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 ^ R/ q$ B& h$ B' p+ ugoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# z7 y- X7 M& w5 f$ Ubankruptcy, they already have debt financing in place.
5 w# @% V4 @ T: y" ] European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 o0 ~/ d6 J3 Z( P" v
today.
$ S5 ]5 m) a [( I; h7 _* G Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 o# O( M( Y! t5 p, `4 bemerging markets have no problem with funding. |
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