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发表于 2011-9-17 13:16
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Current situation
9 J( _& L5 O) g- V4 m* B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; t! u+ q' X# l# F( h& b W4 ~" p Uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ W9 ?3 L$ o& Kimpose liquidation values.
0 h: E* c6 @1 `5 u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
~5 q; G6 T7 |: zAugust, we said a credit shutdown was unlikely – we continue to hold that view.
- T7 e: K. I0 X The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 x, R% A, C k/ t w. A, J8 K* x: Bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. H* S# I% p) ^6 ?' D0 w8 `) c
8 I" p+ `2 t/ e& yA look at credit markets! S P/ v. Y( }; I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 A" M- k4 _1 f6 _3 f6 GSeptember. Non-financial investment grade is the new safe haven.
" s' O+ [6 I6 b8 `+ L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 A/ v/ w; g4 q" }then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 i8 ]; _" V u/ ^- O8 f2 s
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
}0 d9 i1 f4 {. P5 E1 @% Baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( \0 f+ y/ D+ b- x Y- H3 pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ P3 t5 o8 V. p, K: Q; B' G9 v
positive for the year-do-date, including high yield.
2 W) q8 X: T3 K2 e1 {5 v( r Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, R) n6 P( K3 ~; s
finding financing.( ^( b& ^0 [6 I
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 o8 e& @; u; i2 z, Gwere subsequently repriced and placed. In the fall, there will be more deals.7 ?* ^' v0 D2 e' A4 x( W
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 C4 ?9 x1 y" e$ b% u! a! I( U
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& e6 |2 P z2 a( Kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 Y! J' H5 w2 G2 o
bankruptcy, they already have debt financing in place.+ Y2 U+ `; _2 D
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 L' Z) k9 z5 Utoday.
! W' S) v; W" D; ` Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. L! M/ T: [! t
emerging markets have no problem with funding. |
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