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发表于 2011-9-17 13:16
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Current situation7 R$ X8 X: b& I C- I6 @- [
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 @+ c0 Y+ \3 s7 [6 Q x8 ]
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. e: t6 p# E7 E/ J, t5 }1 e, f
impose liquidation values. T; _7 v3 {1 w( h$ ^: T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% G$ T0 C$ W4 N* ?5 A( @
August, we said a credit shutdown was unlikely – we continue to hold that view.3 I& b: O0 x% x
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 L6 A; Z. Z+ a1 N4 f' Z( a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: w& _0 U5 [1 Z8 V
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A look at credit markets
9 X8 b. K1 u! j+ V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 X) x9 D1 v6 g; `7 \
September. Non-financial investment grade is the new safe haven.
" k, u9 s& I5 N: T' g7 y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& m5 ^+ i9 Z+ f. {( A+ m
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 U) `7 s' ?9 T. P- o8 z: l8 [billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 c; d# r) T1 H6 \6 haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) R% K% Z; |5 W. b) @2 _0 U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# G7 a0 `$ x2 X/ u! k0 E- dpositive for the year-do-date, including high yield.
$ z ^: a' j9 ]5 T& s; g3 ^2 F2 b" r( D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; B* X- M8 U* K8 R7 z4 g8 v( Z) ~3 zfinding financing.
: I% Z( [+ K" S Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, {6 r) j$ A; q0 e) vwere subsequently repriced and placed. In the fall, there will be more deals.& T, y# A5 n+ P- }
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 h8 {( H% `, X/ Y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. i4 J- T& x" S! h R
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
% [& b/ u, S& z; Y# W3 _bankruptcy, they already have debt financing in place.: K& \+ q5 U# }' K/ \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" E* W' k9 x- e9 a6 a y0 n: Xtoday.# ~3 _, }2 R E
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in' m0 b, T* D6 Z
emerging markets have no problem with funding. |
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