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发表于 2011-9-17 13:16
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Current situation
- G( r9 X" ]: T% m; Q+ G7 A1 O- ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" f8 z! {$ H' P3 xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 @2 \ N7 K/ W( i0 a
impose liquidation values.9 B, F" O6 I; Z0 u' v) u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 Q# ^8 J* M& q% ~# Y c* W5 Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
& ]; \8 a( N2 B# @0 l0 I The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: S$ J$ `0 _& d7 M* p, F
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets! q( h4 w# c1 U0 Y4 Z* G
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 f; x+ }/ B( ~6 s: r3 k
September. Non-financial investment grade is the new safe haven.. j- ?; l' r& \, q6 z; E) L
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 T% X2 z. N% g9 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
7 Z; j- A; }6 Qbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% U! u7 t& U, S8 z& r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 ?& Z" [+ e! p8 v0 t. {. WCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 J: C# w3 b8 R" P
positive for the year-do-date, including high yield.
4 r3 }8 m$ r- h0 |1 Z3 c- T+ i, i Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# j) w2 I( j( j0 Kfinding financing.. c( w* h& _: f# k- m) e
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# m! z0 R# @4 V j( L, P! o
were subsequently repriced and placed. In the fall, there will be more deals.8 k, B0 k3 I% b: }6 `) y) L6 \6 [
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* F+ p$ M& w- x/ o+ u: [2 d, J; A6 z2 `0 `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 Z, f1 ~8 q: D. A. C$ R2 [
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& t5 @' C. B2 v, q& d. J( z
bankruptcy, they already have debt financing in place./ l3 M( ~5 S, h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain9 \5 b' t2 d0 e! K- N
today.
' |7 E! ~2 j* {+ r( N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: a8 M1 Q8 H: f, A+ h8 i+ C
emerging markets have no problem with funding. |
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