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发表于 2011-9-17 13:16
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Current situation1 A/ f* }" ]1 f% Q8 W' |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 @& i4 U( j. {5 X! w4 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may s; R' K9 D1 f* }, c) u
impose liquidation values.
' G! c/ I5 S2 B, m$ ^0 j9 p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ o4 I' [" g% D& @* M- N7 ]
August, we said a credit shutdown was unlikely – we continue to hold that view.
* X3 Z' M4 X) k6 e# {' h6 x% E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% i$ V" V8 f/ [9 w
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: e4 C" d5 G% y/ ^( N7 N
+ d0 X [% {: j( l0 iA look at credit markets+ H3 h8 b; I! |+ C4 @2 a1 y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ v8 A x, y1 Z0 [September. Non-financial investment grade is the new safe haven.
5 u. \4 h/ a/ G) X2 D1 ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( ~8 _& M6 w7 fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ [5 C, ~ u6 W: y2 o% V+ h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: U% Q3 o1 o1 H# d+ Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. B6 t6 B! R; ~# N+ lCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: W1 H8 }9 T: H" x: a7 V5 Epositive for the year-do-date, including high yield.( D* ]; Y0 p3 E: e* t, d
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( X; L; M9 k* R/ b: i5 x+ efinding financing.
! j/ s/ j O2 Z' V# h: `; ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 I0 H( c4 n: ], W# C5 {; ~were subsequently repriced and placed. In the fall, there will be more deals.
! M) O+ n' m" u7 y& e: V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& v* W% A" a7 F+ Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# K4 J' S* d dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( l4 n, O& ^% T4 z' ^9 `& c
bankruptcy, they already have debt financing in place.
/ y9 t H8 s; E! [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, X2 ~* Z3 X8 u) g" e$ S2 o# h; {6 _& vtoday.; Y5 _4 D q' L2 @- a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
; g# K9 T% c, P5 s3 `( A+ I3 semerging markets have no problem with funding. |
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