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发表于 2011-9-17 13:16
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Current situation
: O S1 w3 p% ~3 ^# \ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 Q% L5 R' N4 o2 v0 j6 x0 G B0 q/ las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" T- V! ^( p- k Iimpose liquidation values. R9 i; [& ~: t8 O0 _& p& J
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; p3 j: p& k) p, x6 FAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) s: n' y4 o: @9 k* g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. H9 X+ [" o' A, e0 v0 ~5 L% B7 iscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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) v i* Q% c! H4 O2 D8 r. ?' tA look at credit markets
* _- h; [( h6 _ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: u) B1 a8 }0 n# D! L2 j
September. Non-financial investment grade is the new safe haven.- V2 e8 z F' L4 O K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( n3 f7 }$ T6 F7 o$ k1 z! s: Pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) w4 k- H7 _2 U) B8 M2 O4 k7 Sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 t1 O% f, {" s+ q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( U; L7 V% }. D X
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% m3 g( S8 l. m6 u/ E, Q6 g
positive for the year-do-date, including high yield.9 Y8 K& o8 j7 X# X
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. T1 m* t0 }* f+ {9 J* bfinding financing.4 k3 g. J. N+ z) e# i# j# F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) J/ E4 X9 w$ F0 J+ E. E8 _5 B/ W
were subsequently repriced and placed. In the fall, there will be more deals.# F/ a0 Q7 Q% y( M( ]% G
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: X6 t+ W' u/ S# Z8 R8 kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 R; ~( L: B4 X% B7 p3 ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ P P! a' B! g, Y' }bankruptcy, they already have debt financing in place.
8 R, Z9 j0 Q: _* T0 ?2 C9 B5 B European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' s1 x# \# l7 z6 v x% r. r, z+ Qtoday.; c q; v0 c$ [6 A6 e/ U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. x! R6 s7 _+ _# o
emerging markets have no problem with funding. |
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