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发表于 2011-9-17 13:16
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Current situation
/ }& z0 h" {, ^3 y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 K9 ?2 B3 y/ X+ T/ D. C5 [5 c+ |. {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% R" ^. o( R0 L2 r6 x( @
impose liquidation values.( e' c5 O! i) n1 a1 C, H4 N6 T2 u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 Q; J5 `; U% r. c7 FAugust, we said a credit shutdown was unlikely – we continue to hold that view.# u) t: `) C; K1 `+ U3 h2 m0 U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension% o0 \' g j7 S; \' _4 _
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 Q# {5 Z3 k' L( c( }
& S1 c7 J: b5 D# lA look at credit markets/ z, B+ p0 R' |$ v" `3 \& f4 ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 E7 d$ X1 X1 `) y. a: m7 C5 y8 o2 l+ vSeptember. Non-financial investment grade is the new safe haven.9 P4 l& s' U$ z* _4 Y1 M) W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! K1 d4 r2 a: e* j3 C/ Q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; O9 w( p% g2 T# o; z' J" Bbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 u* V# A' D( K V+ i
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" i8 c" W& z* Z& N( B7 t+ v( _CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! X0 O. q; U" ~( j. t- z; Z' N" F# _positive for the year-do-date, including high yield.
; f' K1 X- m& z! H5 F& G: { E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" p% b, D- s. X
finding financing.3 F- q5 D V' y3 _. a
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. ]( Y0 ?( C: `: N! {3 [& R* X
were subsequently repriced and placed. In the fall, there will be more deals., b+ c+ T4 A2 O
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! ^) Y& }) L# k8 R* vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ w. r9 `8 V- g: U8 p0 J9 y$ L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' k$ o9 |) d+ B/ w& k" Q `0 Vbankruptcy, they already have debt financing in place., K' z1 ^3 k. N* q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 i2 _8 ?# F3 {5 W3 f0 w' |
today.
/ z' }) j' `$ ?7 h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
* \2 U& l7 p2 I" Hemerging markets have no problem with funding. |
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