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发表于 2011-9-17 13:16
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Current situation
3 T3 [6 D3 a% ~# b. u The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' P; y0 m! N7 W1 y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- O9 N, T$ `2 Y6 R& V. uimpose liquidation values.
# Y: P3 F! R: @( F; o& C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
8 V+ \4 t$ V6 x8 x6 W( P9 PAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: N6 n7 S, c2 @, g( N3 y7 \% ~ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' g6 T6 Z+ @2 r" U% R" Jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 b. E$ W$ z- r, P4 P& D
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A look at credit markets
i- {7 ]7 n: H Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& X g& n7 y$ G! F- |September. Non-financial investment grade is the new safe haven.
, e1 ?: i3 q1 Z R; v& d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' V$ P( v! n0 m: Fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 W/ I/ V9 B' o: n2 n
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, r+ W# S9 x2 _9 M, f' G5 g
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. C3 |: i$ }: f: M' s
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
3 M4 X6 T& ~6 Q9 zpositive for the year-do-date, including high yield.
' ~9 t) Z( p) h" N) L9 L+ o( M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& F9 W) T2 R E) B$ X4 v
finding financing.
2 E6 Y5 p1 z7 q8 v+ Z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* L5 l* z8 I& V" W, Fwere subsequently repriced and placed. In the fall, there will be more deals.
: V) P: @. `; c+ s5 j6 f Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 R/ l4 R$ t# L' t( Eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& p* }# N" z# Z' n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* \, ]2 E3 L5 F0 G; J. y: ebankruptcy, they already have debt financing in place.
! U% R, _3 f* d/ a7 X5 p European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 p$ v9 ?; w8 |
today.
1 G! K8 [4 ^2 i0 k4 j6 z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 Z0 M' m5 l+ B0 v. L, Q+ |emerging markets have no problem with funding. |
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