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发表于 2011-9-17 13:16
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Current situation
. L% U$ S; z7 A; b) c! V, N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, p4 H/ Q. S/ V: M6 n( A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 O' Z7 J; ^) R( Aimpose liquidation values.
/ x, B& x2 ~$ y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' S |- ^# J2 }% L( i+ eAugust, we said a credit shutdown was unlikely – we continue to hold that view.- Q; v8 b9 B' X/ A2 o/ W
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: T% ^3 A a- a6 n. H( w5 ^" j' Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( _) y6 u, h5 n6 N, C. E0 O. m
" g' i: B7 Z Y- [+ n( ?A look at credit markets5 i, U0 r6 ^2 s
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 P0 k. u& t) q" p. W0 c
September. Non-financial investment grade is the new safe haven.
, |# ?( F( m3 o3 q6 F+ [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. @8 y$ c5 ?. s$ A, sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 e; w# W4 E6 Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. B8 a4 {. s6 Y8 P8 |" {2 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 u4 ?6 o; k8 F8 P5 {( SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! Y* s. W* E1 ~1 o4 O+ D1 W/ h
positive for the year-do-date, including high yield.% ]6 f( x U$ |) N9 a$ `. Z2 f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 e8 v- {8 I, f/ h, Y: a
finding financing.
. e, u/ [& ]' I% N2 p8 R2 J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& W X3 T X' Y, y# rwere subsequently repriced and placed. In the fall, there will be more deals.7 [- b9 p7 C5 Y N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! z/ T1 f3 d5 O6 wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 `3 z+ A- {7 J
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 ~6 @- l- j7 N6 tbankruptcy, they already have debt financing in place.
; o+ }% d; ]9 j: r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 U, [0 i2 Z( btoday.: {$ O2 M' V, T, W' D2 X
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' \0 X1 h5 O6 C8 g# k+ Yemerging markets have no problem with funding. |
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