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发表于 2011-9-17 13:16
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Current situation
* f9 j/ S1 L0 {/ t; N% ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& ~% C2 n( |1 n |% n5 \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ v, q6 \2 L! H# i/ ^: rimpose liquidation values.
7 h0 Q$ \& a! z: k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' R& X$ Z$ n+ x& Q- q: `8 R( a7 p; XAugust, we said a credit shutdown was unlikely – we continue to hold that view.
0 y% P: ?# k2 q: v9 F- `' Z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& o* {& [$ _! {4 Z% X
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets7 U; D! o( i8 f
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in X4 O* ~. {& L6 m1 i, j# v
September. Non-financial investment grade is the new safe haven.7 o# `9 _/ I/ j5 k2 X9 ^
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) l& q. C! z, L; w' y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
E2 z4 T- h9 ^6 ^& K Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
l F4 `& b- ^9 Z, Q0 o1 vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) h/ e% f9 ~7 s. t3 X" D* c# ?" d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; b* t) A6 O5 d$ a7 W7 Q/ ]% E
positive for the year-do-date, including high yield.3 \* a1 v5 Y0 {: ^) h
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, O/ y3 }9 R# V# b6 H6 sfinding financing.
% I4 j0 s+ f4 y3 G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ A: t6 l* d: Q3 R$ l
were subsequently repriced and placed. In the fall, there will be more deals.! g& Y% Z, J% u9 P# Y) i+ F- P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and k) D5 b1 ^; O5 W- w
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" P# r8 p8 a4 p9 c3 y! M3 |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
?, N- Q8 ]" z1 A% J& Ubankruptcy, they already have debt financing in place. l( `2 R) U9 W. Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% i3 a" F8 X/ _. `' Z) r) [( v
today.: ~* G5 k( ~5 n3 t- O
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* ~3 c: U1 i. cemerging markets have no problem with funding. |
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