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发表于 2011-9-17 13:16
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Current situation
; E* ~: g# m T% j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% [, \3 _- N/ P) |
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# F ^# A& ~, K: O4 q) I* Iimpose liquidation values.
6 c% ~0 |. o, m4 n$ X. P4 c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, s, U0 S% Q' B2 b* z0 G; j
August, we said a credit shutdown was unlikely – we continue to hold that view.9 k3 |5 ~+ U- ~' m
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 Y' ]! b Q9 q8 M, R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
% b+ w& ^* |9 z7 O' f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 |' t0 t, A( ` [
September. Non-financial investment grade is the new safe haven.
) `+ }0 N* T8 }4 n" J' u High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; |( C( u" C, f; s2 o
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
9 l$ ~* Y1 Y$ C6 ^( k& pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* w/ W2 E4 W9 U8 z; g- x4 }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 A9 p. Z# I+ [; Z4 [; N2 p
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# N. T" g' K, T3 n. ]4 @5 f7 f
positive for the year-do-date, including high yield.9 f4 Y$ l4 z) @% ~& H( d" u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& `3 a0 Q3 f9 q$ z7 [ ~% X
finding financing.
7 Q9 X1 H" d+ x" i Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
. [& S9 @) m+ x8 uwere subsequently repriced and placed. In the fall, there will be more deals.
# ^% k, i6 z# s) X2 V1 J# \ P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 ]1 i/ @& l) [& W: [; wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 d/ t; J& I5 A8 e0 j/ Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; F( Z) s2 T& \8 ?bankruptcy, they already have debt financing in place.
% q5 }& S9 b) K8 `" D- Q6 s3 w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) }: `& E+ |! i" Y& u
today.
6 j8 K: Z6 X7 y4 G, z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. v) r5 y8 C- f
emerging markets have no problem with funding. |
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