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发表于 2011-9-17 13:16
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Current situation
- S, |- O/ V' G9 m. |/ R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ G. Y: |! S1 j Y9 @as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 Y9 U& j# Z M6 x; X1 }impose liquidation values.! \: ]8 k/ k5 {- @) G$ i0 n
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! i" `5 R+ \, N2 Q/ A3 PAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 P1 V2 D; f/ @% p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ Z( ~5 O6 S. V9 F7 Q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
- [4 I2 |9 `# Y# b( J! i& S9 G8 V2 z/ r2 _# r$ J) M8 o d
A look at credit markets
& ~; R) }' P3 _9 M Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! m, }) c9 }* h& ?& H+ a
September. Non-financial investment grade is the new safe haven.
% w' r L' Z$ o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; x I! R# c: V1 }# lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 c8 N4 D K, k- j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 n2 ?% }, P1 Q/ c* v' d, ] }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* Q9 L$ n$ T- S( ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! h7 x, G6 v5 Q; N7 y0 c0 Dpositive for the year-do-date, including high yield.+ ?/ i: b. ~' V8 `: J# {8 d
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
Q1 Y4 f1 U! e' {finding financing.7 G. N9 ]9 E8 i+ K0 H$ Z6 }& Q- @3 Q: k
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 {8 m; p2 K% d( {: z+ w' |! R' S
were subsequently repriced and placed. In the fall, there will be more deals.
" Q6 k3 a4 O' Z0 A$ b8 e4 q" R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* n( p" i$ ]( e& ~6 G3 M
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- `6 n+ h5 y% {" |* I9 K0 T3 Q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for' w7 L# `1 n P( _2 U0 h9 f" d
bankruptcy, they already have debt financing in place.' m! U& P6 y. V2 N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 { E7 @8 j" }! Ptoday., D: v' q% I, L4 T+ S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
M7 @5 [9 d6 t- L$ Uemerging markets have no problem with funding. |
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