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发表于 2011-9-17 13:16
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Current situation
, ~6 n5 E5 X# @, b The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
G2 a9 h4 ]& b0 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, x; O( A3 `9 h, ]0 ^impose liquidation values.5 v) }6 t2 w a2 c- ]
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 A2 n' Q; l! `0 N# {) Y- TAugust, we said a credit shutdown was unlikely – we continue to hold that view.
" j2 ?4 g2 Z2 b, \- ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ w9 o9 r2 K4 B6 ^
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." x1 ^, O& L0 a! { t
! ]3 Z( z( {+ @% pA look at credit markets7 j4 w O' `' D, C1 g. V
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( C; y2 A4 Z! T+ _5 MSeptember. Non-financial investment grade is the new safe haven.
. A; h$ A4 W* r9 Q- m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, f3 k0 R# q7 ?! o, o% Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; k% R5 b& I' \" C1 k1 x |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( g2 }- e2 B$ K/ `* `: n4 b! p
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
) R- S$ c( k# X% dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 e9 {# U7 c. a. A! l& Y' P. _positive for the year-do-date, including high yield.4 v2 c! a) G/ d. x- R3 Q2 n, n/ K
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' \6 g- `5 _2 p3 Q* H
finding financing./ q# P3 W6 D# r' n6 }% c) k4 j( G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ b- |# [5 L4 O9 G" Kwere subsequently repriced and placed. In the fall, there will be more deals.
5 X: I1 U. ?% b- X5 z3 ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 O, w/ `5 F* j' [- r; jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. D# a: n3 B; v1 b7 I# T1 x& Kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. F" ^& {; b) n2 a& q. Y0 |
bankruptcy, they already have debt financing in place.
; v( t6 V D5 x: S0 W/ h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain ?1 R @; s! ~8 f! [3 |8 G4 m' Z" ^
today." {3 h" n, y7 Z$ X' R" v- r& Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; l/ u- v; a$ ^* P$ r( G; O
emerging markets have no problem with funding. |
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