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发表于 2011-9-17 13:16
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Current situation
4 {) p* |' u, `6 r0 k7 K The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ z8 M& o# P/ ]as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# }3 r9 _$ \, I( C7 Iimpose liquidation values.
/ E2 A5 R7 v% g) _) u4 w6 u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 k6 |" n# c0 V* [$ _/ F6 X
August, we said a credit shutdown was unlikely – we continue to hold that view.
$ u6 U8 e4 z! |# B The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ _7 |9 |& E$ f# ]6 d4 l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ T" V$ }$ ^8 J8 a2 {2 P
Z; q: ]; ]( f$ bA look at credit markets% W* L# s' I+ h( f; `, {/ i& v
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* Q& Z+ B9 J% a& v) e" ]' jSeptember. Non-financial investment grade is the new safe haven.6 G% m; u: @/ k( q+ r6 X- C
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 @; r8 h' M# e$ K8 Wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ B3 I7 ?' o+ l- o) {/ g- m
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; V# j$ e5 o; x r9 g5 S; N" caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 p3 g8 ]* a: H9 [9 E/ z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ ^: E- @) F3 \* q+ Zpositive for the year-do-date, including high yield.
: ^9 V5 W! u" N5 }9 N C Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 K: C, [- K$ `1 G. _+ [7 ^0 _
finding financing.& \4 k( J2 d" |7 l1 P4 W( T( O2 ?0 m
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& S- Y8 e) {. r9 Kwere subsequently repriced and placed. In the fall, there will be more deals.7 @8 I* t6 \# }2 J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and" s1 h; p5 o) q1 X" j/ `
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. L0 u1 U6 u0 W$ S2 X- u6 { j9 @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 N' r* c9 h* L- h5 k
bankruptcy, they already have debt financing in place.
8 r4 F2 W1 o5 i3 l European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
i' {, L3 H, T6 ]: {today./ h: L9 A* O; y+ k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# P2 E8 w" A% J& _0 Z# Memerging markets have no problem with funding. |
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