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发表于 2011-9-17 13:16
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Current situation
+ S$ z6 B; R! N& O% t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ D3 q' {) l( @7 |- ^- g2 c: ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% E6 j+ @* m$ J- r' Q, g1 n* Oimpose liquidation values./ J5 H. T5 D7 `8 ~
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 k1 _1 v* N* t; @$ {4 _$ Q; F! ^
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 V2 O' ]! m* h# m" f4 i' [ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% X/ I! s+ I7 W, h4 z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets1 z. ]: k: n& w- E
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 r( w: k- j4 {" V# USeptember. Non-financial investment grade is the new safe haven.
' N! c' ^/ \7 e, M4 e @ M9 b6 X; E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 ^) n- b B2 n0 X: \8 r
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 H p! j, K, P4 t6 R mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: X3 m$ L, m; r0 k9 U1 a. n- i$ E
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 y- Y* Z, f% k/ ?! _- u2 ~2 g4 mCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
) a9 S: { G4 k+ K$ bpositive for the year-do-date, including high yield. }' d, K5 ~, C
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- n$ R \. I' I) ~$ b
finding financing.0 k- y- ~- e; J. O4 e) d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
) K- Z" ]# I3 `$ kwere subsequently repriced and placed. In the fall, there will be more deals.9 c: e* w, F3 Z* @
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* X' b0 \4 i( J! V/ ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. `) X7 J; |( w* y- _ G9 z
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! a: ?, z4 ?: y/ C- k! r+ K9 ibankruptcy, they already have debt financing in place.
! S8 \" A! [4 {& P- y European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ C7 z$ [/ n! L. t
today.
$ N# G0 D2 q' x6 j' }- a$ } Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 k6 Z8 h) a9 h8 P. O
emerging markets have no problem with funding. |
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