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发表于 2011-9-17 13:16
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Current situation
! Y1 m F# d. t5 B( S' R( ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( w; t; Z p$ Z; M2 y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 c5 q$ M% e; N$ B% [( q
impose liquidation values.
2 p# X; ~5 c3 l) T6 Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" d5 Z8 A* V8 ], GAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) X5 Z+ K5 S- y, {( D; h The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 V4 p" [# L' K+ M( a* N
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
+ `& d0 |. F* N2 X8 G- l4 [. t2 [* ` s s! l
A look at credit markets2 W) \% a) x3 ?
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& I; X, i" M# z$ _/ h8 }$ k. GSeptember. Non-financial investment grade is the new safe haven.
' l* D! x* [6 p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 g* j+ g$ H3 L' Y# pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( j( d" u! ^1 |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 b% A* }$ @1 n+ ~) n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 c" Q/ c1 u( t% W, ~/ ^CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 o: N" n2 B5 @ N/ J J3 P2 _, `" tpositive for the year-do-date, including high yield.
/ \! Y( n" A/ I) Z. ], w Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 z3 y: {! s6 z2 E& t
finding financing.4 J/ S9 p1 e* N; N; v2 g) S
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ F0 r: |5 q, Y; K/ J* A3 Dwere subsequently repriced and placed. In the fall, there will be more deals.9 c) F1 d% o1 D& \
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and d! @. V. f# V: p. v* ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( h b! P9 J! @& ?# I! o& egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
, c+ w9 q) A8 p2 {9 a( cbankruptcy, they already have debt financing in place.
8 H& H; H8 ^* C! A u European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) J* S0 j" t6 N% ztoday.
3 D, {& R2 g8 Y6 I+ M; |" _ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* P" ^- H8 B; t( c4 z vemerging markets have no problem with funding. |
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