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发表于 2011-9-17 13:16
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Current situation
# G0 m+ e1 r$ z2 l, v8 W+ ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# Z6 O5 i6 f6 L* @, r% |0 cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! P4 c7 L7 f( n9 }* m9 _
impose liquidation values.
0 }. N% q: A5 d/ v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" p3 w) b7 ?9 v. {% l7 h0 O! G& zAugust, we said a credit shutdown was unlikely – we continue to hold that view.8 N1 x( x& \% n; Y$ [* o
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" W/ @1 V7 }# J6 f+ l) V+ S1 ^7 Z+ f6 K
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( e' f6 F7 g4 mA look at credit markets
$ z, r3 t0 k' T! d% B7 [. \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 B9 W- G3 H6 \, o7 e, VSeptember. Non-financial investment grade is the new safe haven. I; y6 ]( @4 X0 \, `+ Q7 u3 ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# F2 t2 i) n6 {, l' o+ g- L! v/ Z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 s# t! x) b3 i0 ~5 Hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
r6 [6 [' @9 B2 G: l; jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade8 f4 j" i7 @- `! z v A4 P
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ W7 S# i; j' z: W5 U. A. Kpositive for the year-do-date, including high yield." e' m8 J ?! a( E5 {
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 U, J$ W4 c- v& z# g4 u+ H
finding financing.
! o. _/ }' b/ j! H2 s& t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. U, R: h2 N/ b# i* }6 C$ w
were subsequently repriced and placed. In the fall, there will be more deals.
( T: [. A/ K# L6 S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
j/ K' M0 Y; A6 _is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 ^: @# S" D2 U; \4 M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 ~( [ j. S5 R; F" M+ A2 p: p# Z
bankruptcy, they already have debt financing in place.
& r) \$ ~! A H$ M; O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 f N5 z- @# l$ l; S
today.
+ S7 j0 G; n* K' y% @: O d. U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 `5 R R" F* `0 }# P/ `7 C" D" Xemerging markets have no problem with funding. |
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