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发表于 2011-9-17 13:16
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Current situation0 l" Z( y5 N; A) V+ Z; s
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; [/ B( g4 H- ~! J- e* ?$ G
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 W& j! j* ~0 k! C- Oimpose liquidation values.
& Y* E3 m: _$ z* D( n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' U. p. Z( q. B0 {4 @August, we said a credit shutdown was unlikely – we continue to hold that view.
/ [3 U' a5 |3 L6 U) m! I7 c The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) Z p7 ], ?. f; E( J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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# @. c6 ^% f7 @& |1 e6 uA look at credit markets
. w. \! T" ]' U' p8 b7 E Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: D' p0 Y$ j8 ~" z* JSeptember. Non-financial investment grade is the new safe haven.
& T5 u8 P* }- l8 Z7 q" [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! G$ g% Q h" Y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 ~& F9 w8 ~4 @# X7 Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 e3 E/ x7 O xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: U( W U) `4 xCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" j. ^+ y) A: B# Q# B7 t+ g2 p) k
positive for the year-do-date, including high yield.
* b% c9 R9 u& j6 \ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble X8 i4 W+ O0 l1 C# p% K+ G* s: w
finding financing.3 Q C! k: X4 J+ O# C9 S# A6 g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# N2 @+ x, s5 Q8 n$ Vwere subsequently repriced and placed. In the fall, there will be more deals.
7 K0 N) g6 a$ Y1 e% I7 U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 a, K8 V0 C' J/ |8 Dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 ^5 X2 W d; R) u8 Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& Z& j- k* D# q: g
bankruptcy, they already have debt financing in place.
+ k% h. a4 W0 h3 L% { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) M5 m0 k" U2 z% q8 Stoday.
- l( X4 ` x( h) n Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 k7 G' y- G: m
emerging markets have no problem with funding. |
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