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发表于 2011-9-17 13:16
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Current situation
; Z" g5 M8 ~& ]& \ c" G" ?+ t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) l4 f+ | L* E+ I6 q4 bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 l0 q) C L6 u2 Q0 x% a8 [, J) U% w
impose liquidation values.
+ Q7 H" t8 f. e! Y: K In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ `5 H! o) \2 d3 N: f, e
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ N$ E( j- q% S. C6 Z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 G6 K: K: p. x t {, b: Z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' k+ V9 l% @( |& ?0 w# F% ]8 s
7 Y! V& _' M) y" E+ n7 sA look at credit markets
/ x) K) r; s! @* \' ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 v5 M6 A& S/ }: _+ I! c
September. Non-financial investment grade is the new safe haven.
& Q3 w8 o4 U3 V! P1 L! u, R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. g7 o, T! b: cthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( i6 p1 ~) y6 j3 K) lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
0 _2 \& h9 z+ V7 ?' q: {0 f: raccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# x$ z! ?; [# [% `! mCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 ?, y" [% d/ P6 c6 p" b8 A. z6 O( G$ p
positive for the year-do-date, including high yield.& Q/ l1 n8 G/ _. M
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 N0 |3 Q5 Y7 z3 F; V! i4 P1 Cfinding financing.2 d9 R" V9 ]# d+ [- z1 a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 J$ v: l7 a ?& M T- y/ t. ?7 I8 Kwere subsequently repriced and placed. In the fall, there will be more deals.
% A0 \* H$ c5 `! ]! B3 F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 ~) c7 g( J1 d+ {3 Q0 [& His now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 {* Y- E' b/ ]5 egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ {" L9 z8 G& fbankruptcy, they already have debt financing in place.
; F+ L2 A/ z3 U- q# n9 G' F% b; ` European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 d; ?3 e8 Q# d- ~5 t T6 T, N
today.# J$ A( |+ i% @. |/ Q/ q9 g
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) Z1 |6 ^% ` J% Oemerging markets have no problem with funding. |
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