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发表于 2011-9-17 13:16
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Current situation
! ? h. m$ L- B+ J1 A) ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
t Q9 S4 N3 D) Y* W, f- O+ Yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 P% G' @. e4 V* A7 L" s& [% s# j3 qimpose liquidation values.% w; H7 _( b) o( H8 w& S% ] r$ q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 V$ v4 m3 Q& D3 N0 ]( J6 |August, we said a credit shutdown was unlikely – we continue to hold that view.
1 I0 h* ?/ Y, H+ r9 k1 G% t5 i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ {& ]' N7 H/ A, l2 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& F: k7 {+ |/ S
" a0 O% d1 X; \$ v4 qA look at credit markets
) Y3 c6 z1 @3 w; H2 G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ [' Z% y3 a @4 ]/ x4 e x
September. Non-financial investment grade is the new safe haven.
3 L" w5 E4 ]& D' e/ ` High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ p: z6 h* k. p1 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 D2 w$ n' u) Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 F3 O9 N- F' d* p ?
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: [; a* G* y! FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! n. f/ P S. y, P R# o! l
positive for the year-do-date, including high yield.
3 \5 f. e. k* F( @4 m' ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* w; ?/ e5 {7 _, C p& [8 C
finding financing.
2 ^% g# Q2 j' ^7 A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% q8 v/ ], W" Swere subsequently repriced and placed. In the fall, there will be more deals.3 l3 V5 b) P2 p& w5 C5 b2 A/ a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* H& n" N3 [* Y6 e$ U: i4 D1 |* `5 ]
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 z6 S, s5 o7 ]6 n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: S- h# G; |4 B2 Y# m4 b, l1 I
bankruptcy, they already have debt financing in place." x6 f' g$ U' x7 [
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% I6 S( W" ^% w+ w2 {
today.
1 \8 Q' O$ X+ F' V2 L5 K/ o! ]5 t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% k: A) b7 Y! X4 v' I& w
emerging markets have no problem with funding. |
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