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发表于 2011-9-17 13:16
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Current situation
+ A" [# c# P7 h& d" G9 I" Y2 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- j4 F; `- y" p0 v- x$ Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
3 n; q: v/ x3 himpose liquidation values.
; x6 l6 \3 C8 ?7 o$ q5 Y- j" D& K In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ Q; Q6 v l: M9 _/ t6 G$ yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( K+ q2 O8 t3 K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' H" G6 E# z W$ V. C7 j, t6 E
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ `+ G, t/ ^7 {& M3 t+ {( b
/ q+ a2 k. n0 g GA look at credit markets
) x8 q) Z5 |5 ^/ O7 C Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ C& @ }4 H4 i" S8 t
September. Non-financial investment grade is the new safe haven.
, i8 p p% _ Q3 N2 F L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ p$ t) f) [% l, ^* Y9 p% n( z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: N$ O' m) Z9 h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, D# A- E0 \ Z" M$ u! u2 `" Yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# K: y$ k- i! o% V- u. SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: j6 ]; r" x* Y
positive for the year-do-date, including high yield.9 n5 v) m! p$ I6 B9 _6 h4 a
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- g/ P# k7 k! M& o1 l1 G- Ifinding financing.0 M" l0 u+ z0 J |+ y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ J1 E& K3 R$ i0 r" m- j! b
were subsequently repriced and placed. In the fall, there will be more deals.+ j3 a, b: x4 O* J$ V
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( Y' c H& _+ i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 A" y v9 @' }9 ?! W. G Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 y% @" q2 U! D) u! R. l; M t) Ubankruptcy, they already have debt financing in place.
0 c9 F- [8 v+ ^6 C0 r& ` European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 |; W( o; ]2 N9 `% j% L R2 h
today.
+ W6 z% W! Y6 f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- B, R1 Q2 W' r! i; K( a
emerging markets have no problem with funding. |
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