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发表于 2011-9-17 13:16
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Current situation
E* a/ q+ p- P) d2 F/ s$ t y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; s) ]* g, ~1 X/ t
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! ^, S5 ?% |- g. U7 m
impose liquidation values.* f! m" v% A3 c7 @$ ~1 E H6 _( h( C$ |
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 R$ c, i3 L; rAugust, we said a credit shutdown was unlikely – we continue to hold that view.
/ t/ t( R1 |/ b* B& O3 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
" a) e% _ ?' Y) Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 P: U4 p7 U/ e) K2 [# f" |
. l% Q1 c: i7 UA look at credit markets
0 u4 `8 ?" D V S( U% ?9 g0 a7 _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ J2 B$ n) b; `1 y; @7 cSeptember. Non-financial investment grade is the new safe haven.
1 O# q$ |' r4 U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
% J% D4 P' m3 l6 J+ W% |0 ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; |2 e! r; M, g
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( |: y4 @9 Y9 e R
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ y- M, d1 K- g" L" c- i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ D3 ]% k8 Y7 d2 d+ Y, u7 Q# h+ gpositive for the year-do-date, including high yield.
3 a$ ~( c6 {. V Mortgages – There is no funding for new construction, but existing quality properties are having no trouble2 |( _2 a8 b" c7 }0 m
finding financing.
; n7 p6 v: M1 a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% U/ c, e! j3 Iwere subsequently repriced and placed. In the fall, there will be more deals.
. n# a+ A, @ g7 _( E) @ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# n" I9 e" ]2 M% t( o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# w# z( [& d5 b4 I9 t4 m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ K4 _8 w! `% f/ }7 [! I1 Rbankruptcy, they already have debt financing in place.
3 {" d1 F4 W5 H$ ^6 | y A European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 z, ~, s6 n: Vtoday.* Z# U; d! Q% g1 H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' q/ N6 `$ V. Bemerging markets have no problem with funding. |
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