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发表于 2011-9-17 13:16
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Current situation
7 u _) q( Q1 B9 j3 |- d" f# D The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- V$ W! @5 z4 e3 F0 s7 Y. Eas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 E3 |3 z1 ~3 j# d* p6 X7 ~ ]6 t
impose liquidation values.
, N5 k4 r& u* ^4 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 D( F9 v' v2 y( f$ h
August, we said a credit shutdown was unlikely – we continue to hold that view.
' K- k3 X! \+ \8 `- o0 k% R. n/ ] The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 A( h8 a' w0 L- b5 S2 p8 @! |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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?- s. s+ `9 @+ N1 o: ]A look at credit markets
, s/ @& O( y1 V1 {# ^1 C1 I, T Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: `, }3 D; [* G; F' g0 l ASeptember. Non-financial investment grade is the new safe haven.
2 c6 E3 c; |1 I, d7 ]5 D1 n' F3 g High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 y% M M8 G. F: b
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* D2 u" c; `3 x, d' fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 t1 E3 K7 [+ G( baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
2 t I N& h! w- t. i0 \0 eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: k% L4 R0 j; j, F7 spositive for the year-do-date, including high yield.5 |) t h, N$ K7 U
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ A4 m4 w* T2 d
finding financing.
* w4 c+ D. e9 V E Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they L. g7 T7 e9 S! b) G; k
were subsequently repriced and placed. In the fall, there will be more deals.
3 ?+ Q7 z) a0 p: T& c- \6 k" d2 m Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 `6 b, t3 i1 C0 ^. G2 _6 @, `9 L; Z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% U9 D5 b# J3 j. {1 sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: n! ^. b1 T( B; \, v6 q5 Mbankruptcy, they already have debt financing in place.
* d4 c6 N1 Z; O A4 ]' q European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 n1 c0 I$ Z" O4 o, [) d$ Etoday.
3 h3 L, i9 Q" G: a0 m. l; I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 {& I+ X% f) O' v6 w5 Xemerging markets have no problem with funding. |
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