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发表于 2011-9-17 13:16
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Current situation
9 E- E7 R* F# f5 W4 } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
a1 ^5 O3 n6 k6 Vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. _% X, z8 J' P" |) a
impose liquidation values.
: I2 g5 C0 r) Y6 } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# O2 q$ ]5 d/ I& I! r5 }, y7 o' d1 l0 ]August, we said a credit shutdown was unlikely – we continue to hold that view.
$ N$ d8 d$ u& k4 R3 P9 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) @1 q+ t5 ?; o7 Lscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
+ o0 \6 e" |2 H/ J' ` Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 q0 h% H: B# ^ [September. Non-financial investment grade is the new safe haven.' L1 N7 y, Q6 S: n! j- U
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) S. w# m# ^( n* G7 U9 s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $19 W" R: B' O9 N- S+ L3 ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& D3 u% D& q$ _. p" t- qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 X0 R/ u/ S) X/ _/ F3 V2 W/ a6 mCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
5 D7 U$ N: y& e5 F: ppositive for the year-do-date, including high yield.9 M8 F& t" z* V, N
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ _5 N9 f4 B$ M4 N: x2 I [finding financing.9 g. _. t; M+ ^ ~; H7 ?! W7 B
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# h: W; W3 k! p# S6 [( Z6 s. g7 H
were subsequently repriced and placed. In the fall, there will be more deals. }. W2 o7 b% ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 n2 N7 C% E- K' ]
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; S) I% ~. m) o2 fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 c/ N" s3 d7 G2 S' o) ]4 @9 ]
bankruptcy, they already have debt financing in place.
/ ` i# U+ d1 b# q$ w$ w) ? European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 ?! B6 ]! l) x' J5 U& w& l2 E
today.: K& ~9 R2 B1 d# v$ r1 ]- w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# l! U% V! Q: z3 k1 jemerging markets have no problem with funding. |
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