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发表于 2011-9-17 13:16
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Current situation
; f8 @, K' ]* ]* e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
- P) J) u/ n" ]6 ~% ^' \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; O% U1 X, Q& |3 @; B5 Z) Simpose liquidation values.6 y0 `( e/ r. ]& Q: A2 A R. W# |
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( A) }5 A6 p% _
August, we said a credit shutdown was unlikely – we continue to hold that view.% r" v% b/ L$ P+ b% Y- V- R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* W: l% W+ [2 y3 [, f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 z) H: p5 L9 E4 N: ?$ E/ a
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A look at credit markets: [- j' c V3 u+ e! S: Y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# i# x, n: {$ i P$ Z
September. Non-financial investment grade is the new safe haven.* d% O% H& J$ r. B9 G/ X, o
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% a' F/ [0 [2 p
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 v- ]) \. V& Y& P. Y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: O. p! g) \/ A( Q4 naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 ^( ]& Q x2 E& H. yCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, @6 U& P* [3 e9 E7 L
positive for the year-do-date, including high yield./ L# C: h2 M1 l% b1 |
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" q4 Q+ p% A! d0 `: wfinding financing.
4 E8 L+ a4 Z; g4 s! I9 n0 P7 c: ? Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# B S8 N; g3 m9 j D9 A* P3 X8 V
were subsequently repriced and placed. In the fall, there will be more deals.6 w, g" P1 U, v/ b# z; b: `& N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& P+ s+ i8 a) i% c6 c
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ U; @( X$ M. @4 ]
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for: D8 c5 ~- h+ N; |; T9 b2 d! o
bankruptcy, they already have debt financing in place.9 E Y+ P# U! W1 \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' k# z; X4 U5 Ztoday.
) v2 O; H* u1 r0 l; }8 D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 H1 S! ? D# I! k9 T
emerging markets have no problem with funding. |
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