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发表于 2011-9-17 13:16
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Current situation
+ F. S; v) `) v8 `2 N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ S9 x3 U b0 l8 A8 q) t p: e6 Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 j% D; {9 ~/ t0 qimpose liquidation values.* T* d! L- C7 c1 }5 V$ `. s L& R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; m9 B, o |5 P A; z# S. WAugust, we said a credit shutdown was unlikely – we continue to hold that view.- y# ]$ i2 ^8 @6 N, c; P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' k+ G8 V9 w0 V; k `& Q4 }" Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 q# q$ l; O( g- R1 R' _
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A look at credit markets
1 }+ y4 K( ~0 H9 n! V5 y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 @/ l+ ?9 _1 F/ ?6 Q9 I
September. Non-financial investment grade is the new safe haven.
/ I- O- c$ u+ F. Y# H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! e2 o' v4 W, I2 Q0 |
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- m- l2 b/ V- ]0 u. Cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# v2 `: R0 ^$ K8 c: x! \5 W) Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' a+ h3 }6 Z4 F9 ]CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. Z: }" ^+ c" J5 T/ M4 W" gpositive for the year-do-date, including high yield.5 b" @: ~9 ]3 |" g" s m% x# c6 w7 n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- A* ]* V1 }* k. u8 z$ A0 ^; Rfinding financing.
: l5 N2 O* E1 z" b1 n Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 t7 H) e: k. p* u
were subsequently repriced and placed. In the fall, there will be more deals.
1 {9 {& C( g6 P- j+ ?2 F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 o& ]* W( T/ z$ B$ J4 E& u, y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were4 b0 u" ?) s% Q5 c3 D
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 O* i8 C* H' Abankruptcy, they already have debt financing in place.
' X, w$ @% K1 u5 `! y European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 Q6 T" p7 ~/ Y& E# V* Q! E
today.) A$ S) w) F* F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in x( i7 W4 p. c. w" O
emerging markets have no problem with funding. |
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