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发表于 2011-9-17 13:16
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Current situation
$ R. ?& g+ @7 }: V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 k, [- ?4 m% c& d9 A h7 x! V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- B* l6 i/ E% ~8 F8 Q3 y, p3 N8 h/ @
impose liquidation values.& t+ V) ?" d' U7 e2 t9 I3 P
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, P; d, U: W) V# c# KAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) c% i; Q8 g+ F& A( a' t; { The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ ]. O' L) w+ S4 t3 ]' v' Q0 N- z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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7 J R! ^. @; M+ Z( e7 D" X9 [8 p9 `7 |A look at credit markets( x1 l5 W( i/ j0 L' ~# h" v; P
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. x9 R3 T* f% W
September. Non-financial investment grade is the new safe haven." C: n7 w# Q% t3 e# [7 l0 y/ C
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( W1 u+ ?* V9 y2 wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 D9 N! x; F* Q$ |billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) J1 v$ n3 _% Q. Z [( Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' C! y0 o z* {0 g% o
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 N# ~, j4 i8 Spositive for the year-do-date, including high yield.
1 Z. ~, E# ]- q. ?7 Y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! y6 C! t! v* x6 N- g
finding financing.
' L$ _0 [, y" |. V- P; P8 s# V; V& K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& w4 K8 R. e. X! [
were subsequently repriced and placed. In the fall, there will be more deals.
4 P$ @( X! x% O5 ?5 `1 V Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) d' Z/ v! a( `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
A; _3 w2 Z" _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 J' O2 o- O+ y3 p# k3 z r* Tbankruptcy, they already have debt financing in place.
" F# o# |, g9 j4 \. g European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 J( \) r$ }7 b I/ S+ Ztoday.( _/ c0 T. L% f- m0 c
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# d; g8 F+ x" [) x7 o- E3 V Xemerging markets have no problem with funding. |
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