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发表于 2011-9-17 13:16
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Current situation
* E) `' e0 Z) R# Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ j" B; B9 @, T0 f" X9 m" ^as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 ?3 l' F" U- Z! wimpose liquidation values.& E( O* B0 e% y) D1 o: w3 h+ _2 t
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! D0 n, h+ U2 t! H2 v" ]) o
August, we said a credit shutdown was unlikely – we continue to hold that view.
: `8 g/ M6 z1 L; X; N) K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 g [3 K* `6 L. I: uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! X e' K/ _7 l' b9 u; R
6 G2 G& s' B: H+ i2 L9 E8 ?A look at credit markets# N: y( i3 l' m% c/ U# L0 A
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 l: \0 R) ^! \2 W6 g" S
September. Non-financial investment grade is the new safe haven.
: C. s* e1 Q7 a8 t1 x& E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% {7 V6 e% g) z, |+ @3 X' d4 W
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, v/ t7 d1 `, L/ U1 }; fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have; H3 Q& l) y- x# d6 l4 ^& G) ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 q) I( w5 X5 D _: E6 U* B; y# H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 C6 j0 P5 N9 I8 }' b2 _; apositive for the year-do-date, including high yield.
' d! o3 w: H; o3 w* j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* Z; l+ h0 G; |
finding financing.! ~8 a6 C* O! v5 u
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& Y/ k1 u3 f/ L6 i* h A+ A
were subsequently repriced and placed. In the fall, there will be more deals.& L- P" z# q8 y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* G+ ?$ ~" J5 V' P4 C, Z5 @; i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# |2 W2 h) N: ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, c$ h3 u* D' J* C/ Zbankruptcy, they already have debt financing in place.7 y: q; O" P5 R, M. H2 w+ P3 d5 H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" `4 l/ A# n4 Q3 k
today.6 t' G. Y8 E* D
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( j9 L$ ?' Q3 E$ Memerging markets have no problem with funding. |
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