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发表于 2011-9-17 13:16
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Current situation
/ a0 Q; ~0 C7 I$ c4 H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# O# }" ^) n. _6 L/ b3 s( o1 Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 Z- ` p" o% _, z4 K
impose liquidation values.
* X. X! |4 H. x; I7 N+ @$ t$ h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- x2 ~' I2 ~& j9 D6 @August, we said a credit shutdown was unlikely – we continue to hold that view.
; @& m# q( {; ?" z) q% ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 X* g1 N ~' ?" \/ ^& Escrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., ?4 f @0 F) q. O! J( ^+ a# x
" o! i; w: y6 t9 qA look at credit markets1 Z; U1 [) m2 m2 o
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" z( R( R+ t& N5 G c: t4 c( q. F
September. Non-financial investment grade is the new safe haven.
+ B* f; @/ ]' d6 _7 l3 H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* Z. R* B. V$ { ^& t) qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; h0 G, k9 R/ tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, ]9 r4 L' [2 u) R/ ?3 {& w2 g3 k1 Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" B1 X z/ [/ | g# N/ h1 n4 T6 fCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 k+ z$ t$ `1 x. M6 b) ^! Opositive for the year-do-date, including high yield.
' \: C. ]! X8 g' R9 X B) b Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 W$ b0 E# y- r6 D h. p
finding financing.
6 Q3 a+ n+ ^; z- R/ e* ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) l4 I5 }9 }- E' [$ W
were subsequently repriced and placed. In the fall, there will be more deals.
2 X# Y2 G7 R$ t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( U6 K' V w5 Q4 U/ v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* n# v b& o. ]4 g- S% R1 M+ jgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, W& n, {4 R3 T/ ]9 G# D0 U3 Nbankruptcy, they already have debt financing in place.
$ j5 c, M3 N6 I$ R( b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" w; n' k2 F% s, Q' n$ r# e; R3 k
today.
' j" T! V4 Q T# \; Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ N9 E, L1 p- ~7 ~emerging markets have no problem with funding. |
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