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发表于 2011-9-17 13:16
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Current situation
" v% Y' n, s0 D7 m& v c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( S0 n5 Z4 A8 J2 s c+ Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) x; q! F7 W4 p/ Aimpose liquidation values.
) q9 o. v" x. w+ N8 | n1 e) } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 v4 d/ _& d5 ]; g
August, we said a credit shutdown was unlikely – we continue to hold that view.4 M4 a- G9 w- s# E' P8 G7 Y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. z0 ?6 U$ p& q- I# g* C: e6 {) Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 W8 i* |8 w" m. c
0 S( g8 ]6 j% u5 k4 o0 KA look at credit markets
) w. \: {( G: Y& s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 H( m& `' e7 n2 D% T
September. Non-financial investment grade is the new safe haven.+ ]/ t; w. @: v+ l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, H# B- R h0 Z6 ]+ Xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( z! C. q e2 V+ P4 }4 E7 n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 W- L( F8 J% f7 B/ p! p
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 t& [# V8 P9 F4 G+ J; gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 \& I ?3 U, J9 a+ u) ~" U% e, F; B
positive for the year-do-date, including high yield.# v3 C) \7 e3 K0 f) \" w
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# E# G) J. o; j+ ~) I
finding financing.
% o8 S! @6 z8 d5 g Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 t7 ^; K4 v/ k
were subsequently repriced and placed. In the fall, there will be more deals.
: H5 [; v5 j) U: l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: A n0 t! A) ^% sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' S3 Q+ e' O% b o6 t4 T) lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- H U* o6 ^5 P) w* S y2 d# c
bankruptcy, they already have debt financing in place.* O+ W$ s: o$ V# z% S& w
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain# s: x8 Y8 [% m4 c
today.
7 p8 a4 m6 z# Y, U0 s$ X Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 Y3 D* ?7 h. d1 ]0 Demerging markets have no problem with funding. |
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