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发表于 2011-9-17 13:16
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Current situation
, s5 V! L2 n2 O2 o/ S }* c$ b* |0 g The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 V9 X M% T2 W' H8 K3 z% f% ~as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 k& @1 ^9 ~8 l' q% Limpose liquidation values.8 \8 z: l7 }+ D( B; g; G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 f0 K. P- w) y6 o- G; X6 lAugust, we said a credit shutdown was unlikely – we continue to hold that view.- P5 c4 E1 ^8 o0 H3 C
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension. s3 m! H; q8 z, R- |8 c% A$ o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 K1 V B+ F6 E
8 b a" ?5 y% S( C+ ~8 m( bA look at credit markets
. r+ ~" _! G5 H' W; ] |4 A' W2 b Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 Y- `+ H% Q1 L3 `1 u7 K
September. Non-financial investment grade is the new safe haven.
+ z i7 \- d! Y% A' `$ g High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 V, a( q2 {* y8 Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ B1 i! T1 `' `& b0 N! U1 ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' f1 ]1 v* W( X. p: V0 a9 ?+ b8 Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! |* G: f9 m( V. V% P- z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ x4 z; o! c: z3 U
positive for the year-do-date, including high yield.2 z3 i9 j6 K( C) S+ t4 o7 m
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, ^7 V% w! x1 A, S5 y# xfinding financing.
, ?% t D! X- L, |, d3 Y) {, G! X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ Z/ W9 D1 q% Y) F$ N& t8 i) p5 m
were subsequently repriced and placed. In the fall, there will be more deals.
0 n& r: D/ [ @% `3 v Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ r, s; \; w g# P) n) h4 ?, g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 C3 N7 F+ m5 V& J$ B9 X, Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 m" E# M$ {9 Y O Q
bankruptcy, they already have debt financing in place.
; o* n$ o0 t/ @1 c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 i# T% h; M7 @5 k) d G8 t
today.5 @1 E; o3 k' Z; i; n
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, v; i9 Z U2 c8 }emerging markets have no problem with funding. |
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