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发表于 2011-9-17 13:16
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Current situation
) ?& t8 D4 l' {1 S2 s6 J9 S The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
1 E! z- H. p& y5 {4 p, O! mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ Q# y* S. B. q4 Y" |8 D' H$ [) I
impose liquidation values.
9 \& g1 j7 Q% ~' x( K6 u+ k7 C7 m9 C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 I% z& r+ g$ ^1 k8 XAugust, we said a credit shutdown was unlikely – we continue to hold that view.) T7 g* D$ E$ X# j, s
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% u8 a) A6 E( u% Q5 Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ x5 V5 B* J6 T; {# T4 p1 J8 F2 R( \
5 L- G! F9 L2 a T! s0 x$ g3 jA look at credit markets
- p/ \6 X' |* }8 m( g+ \; J Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- e2 h6 ]3 d$ s7 Z: @; j
September. Non-financial investment grade is the new safe haven.5 u; Y8 r1 @! `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. l) p3 J; o. Q0 _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 u) k0 a# ]: A" i5 [billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 l' \! G! z% v7 uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# I9 S& s2 l+ ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 R" s" g) t$ f( [) B7 E6 O8 `! K4 b3 J
positive for the year-do-date, including high yield.
0 i8 l6 G" p( u$ r, b# N! Z) G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ R: O; J) N/ R% ~) q9 M4 {- Pfinding financing.% [5 \- i- ^9 n5 U7 \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ L& n# f$ ~/ d. J7 O" a7 iwere subsequently repriced and placed. In the fall, there will be more deals.
$ f8 C* c# \ _+ I3 Q$ A# J7 S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; h: U/ a% O! i$ {0 S3 ]( ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 [% a1 H' A+ ]' a& Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) F2 a1 j) C% v
bankruptcy, they already have debt financing in place.4 a% S- I+ X8 O' c
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 p, Q% y3 C( a; d9 c4 stoday.
) ^9 w7 N. f+ Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ v2 h* ^: u M, w( E' `8 x
emerging markets have no problem with funding. |
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