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发表于 2011-9-17 13:16
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Current situation
7 C6 b4 A3 X7 T( V% H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( G# c! N# _( B- P! e
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! o' w9 B' Y6 K5 I) d
impose liquidation values.
4 X- B. I5 B1 n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" _! s# \2 T' yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
2 _. b4 B* u1 B3 `3 C+ d! ] The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" f2 [0 Z. w5 p8 _5 G
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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. F, j' x9 t' h; y2 k) B& ?A look at credit markets
. T. t% E5 d9 \8 H* M8 N Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
$ U9 G! c" @% M1 I+ a) gSeptember. Non-financial investment grade is the new safe haven.
* R3 p4 E$ }. {5 T3 }; h4 o* e$ ^ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 g) _$ a, o& p' r! C! T# A) Bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* G- Y3 K7 X" \2 B& ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
z+ A- ^, u: E& j" taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' ~! F: k; k( UCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) H4 ?) c7 o: k$ o8 b4 P }/ mpositive for the year-do-date, including high yield.
/ U/ l4 L9 E2 `5 K0 {, K Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* a: V/ M. u- ^" r3 U
finding financing. k9 x+ o) f, G! }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 `& l) T9 F& ?7 N8 |
were subsequently repriced and placed. In the fall, there will be more deals.
8 @1 `7 i) I/ N, y& }7 O4 O* |$ V/ c Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, L9 _* E+ o3 _! Z- {! ~+ Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 k ?9 b+ z q; @0 o N4 V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: s8 }/ {* D7 B; P: ^bankruptcy, they already have debt financing in place.+ t. @/ C3 N# o0 K* ^4 `
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# g6 j$ Y( [: u: f" \- M
today.
( _% S% P Q7 f& u8 \/ b Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 v/ ]) _7 C; d
emerging markets have no problem with funding. |
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