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发表于 2011-9-17 13:16
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Current situation
1 ^6 y" ?5 r5 j1 |6 q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% \' g3 X9 Z; U. r3 W9 a) W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- X' A6 w* B, m; ^4 r3 L
impose liquidation values.9 I$ c) Z$ C+ S+ t0 J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ @2 h7 [6 h8 g \5 aAugust, we said a credit shutdown was unlikely – we continue to hold that view.# L& Y8 j& S8 U7 _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- X/ D( Y/ x0 |% i* M1 Rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; t& o& x- ^6 k& V( P3 ~$ aA look at credit markets
9 x% `- o; n; e9 L9 `: V8 h Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& d |6 H, u; A$ ySeptember. Non-financial investment grade is the new safe haven.
* r5 ^+ s: I. x. c; K. ~4 a High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ P3 |0 `8 w5 k1 P, L5 V# h! ]
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' l' u* e2 ~' f- ~# w/ _0 d, U1 l
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 G6 z( b: H& {( J6 z$ a) I& @
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# w3 O) k7 C: ^- g3 `8 C; gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 I& P1 y8 g- X \1 b7 `positive for the year-do-date, including high yield.
% o9 b- X. b; _6 l. e& T! d6 y3 [ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" E& l5 Z1 W4 L) O/ |+ H
finding financing.
5 x+ ~& W8 n. I$ j2 l! { Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 s' u$ Q. p0 b9 e4 q( O" `" vwere subsequently repriced and placed. In the fall, there will be more deals.& s# G% R9 }) m4 E' P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% G( u* s! S. l! m! M* t: C, Uis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; T8 {/ F( y0 P7 L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ ~+ m5 i! ^9 O4 r# ]$ ^) R4 d( t
bankruptcy, they already have debt financing in place.
p/ e& D& V4 K2 w3 Z) V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 F( R3 _0 V; M, O& ^3 I
today.
; U4 i, M: f) r- N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; z# d/ k5 ?7 Y; s+ i
emerging markets have no problem with funding. |
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