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发表于 2011-9-17 13:16
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Current situation
" w) G7 ^3 e3 k The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long; D2 p4 O5 X$ D B9 `8 u! Q' r% c; V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 f. p% l' a* ~; c }* s Bimpose liquidation values.
- `3 T! z5 Y; U( U! }# T/ h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! n# h7 s, `& L6 N
August, we said a credit shutdown was unlikely – we continue to hold that view.; K, ]9 W8 T" n" F5 i6 {. g! O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension! K( A( ]: u' I4 Y6 t7 g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets; s, M1 F4 F" x; H
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ j! K) S: f0 }* {# `
September. Non-financial investment grade is the new safe haven.
- W$ F* ]) a+ U) p2 M! | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ U1 y \' n. Ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: r' u% {+ t+ x& E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* v& g, f& D1 N7 x: |" }access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 U+ j: y8 N- q9 W' L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 S' N$ e! Z* k/ N
positive for the year-do-date, including high yield.
5 q$ |9 `+ K2 Q9 P. { Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' b$ V8 ^# [% o% pfinding financing./ E2 b4 N) I$ ?/ R4 c
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( m. K. ~4 p2 v2 l: j8 a
were subsequently repriced and placed. In the fall, there will be more deals.$ u {3 o/ ^/ Z% g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 d8 {* D! m0 D8 V Q8 o1 Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 N4 }5 e1 L; {5 Z% q
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 N! d& |! j9 `# p2 h: m4 j/ u obankruptcy, they already have debt financing in place.# c" ]# J6 g5 F- a" ]( E: Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# w+ S% Z2 H1 ftoday.
0 q( N0 }0 P" h; x/ f" B9 U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( V% h: J( `$ `3 ~0 f
emerging markets have no problem with funding. |
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