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发表于 2011-9-17 13:16
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Current situation
: X: D$ h2 M6 j7 J1 G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* D1 |$ ~, a4 ?+ Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 z1 I8 s2 g9 A5 L( _. p
impose liquidation values.
5 h k g4 @9 C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 t2 a$ N' O$ h! q( g& @7 zAugust, we said a credit shutdown was unlikely – we continue to hold that view.) S- L% @# L0 w' C; W
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* ^# D; O7 F4 J) vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# }" U# @( u. O2 r ~/ s' j
+ _2 f, f; y) lA look at credit markets8 Z! _# S3 |% X2 L$ T/ k( L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
m0 X1 I: g8 {" T: U4 `September. Non-financial investment grade is the new safe haven.
2 i* R* h7 W6 [( _/ q# y2 P. Z/ \: z High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
3 W# {% o N1 I; Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 @4 C! `/ p4 O: i2 ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have5 j5 D( {9 E3 z; @
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 i9 X/ M/ _/ z3 ]* C
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( J% |0 l: A3 n H, l; O2 H% P
positive for the year-do-date, including high yield.& x% x- O4 [: X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 I8 V1 Q6 ?/ e, \finding financing.
; a" I( c3 ^6 E! a7 n. y: v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 `8 W, V/ }1 ?
were subsequently repriced and placed. In the fall, there will be more deals.
& g( J5 M( H; ?: t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: x$ W$ x' O: N/ k. V4 y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 h$ v. [5 G9 w5 A# }* I6 s5 s8 S5 ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 \( Q% J4 B2 L. G, i4 H
bankruptcy, they already have debt financing in place.
# P( x- C; |9 S/ S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 J i5 T( L7 Y$ k/ a
today.3 t1 N# m4 h$ P
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 Z' a2 r& O' G# s, r
emerging markets have no problem with funding. |
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