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发表于 2011-9-17 13:16
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Current situation
' O$ z" v1 F. R' h% t# } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# f6 t/ w; _" Q" v# j4 v2 Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 E! G# a) p0 {impose liquidation values.
! H6 s' r, Q# G! Q( p/ X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ C4 V2 K/ \2 a3 r, n
August, we said a credit shutdown was unlikely – we continue to hold that view.( X' R! p. u6 w4 Z& c: u2 q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; s0 v6 y) o! {! j1 Z4 j4 Jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 ` O, }# ^* P* K& U' [
; U0 l' y9 q$ ~5 ^6 |: v% zA look at credit markets: Z8 H1 z. E. [" Q
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
t w# d, o% t6 ^September. Non-financial investment grade is the new safe haven.
8 O ~6 x' }# | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 A9 B. H9 {9 G; e) S2 l3 V/ g( T+ V# R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 c% j1 z6 Y4 b& p+ R: l0 Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( \' V4 ]5 D, A/ u2 S
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- C% c! r% t2 ]0 \+ s: t3 D8 j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are' l2 M9 m$ f3 `; _& P4 f
positive for the year-do-date, including high yield.$ y0 p% O( z6 s, i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ W8 N. r" F; _8 @+ y0 v
finding financing.
* y9 A: r, k5 {/ p2 r+ G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they V+ J5 H4 x C& _
were subsequently repriced and placed. In the fall, there will be more deals.
; P1 W% M# y1 h ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 y6 B4 K5 m; Z* a0 D' ^ u6 m( a& Q" lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ x8 x8 P; O1 M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; Y" X* o) l$ k3 X/ I
bankruptcy, they already have debt financing in place.$ }; q2 S% g+ e. Y) b( O
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- e* `3 z" t9 o8 utoday.! t) ]" p% r$ d6 O. x
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 ?* k! {1 O8 a9 k0 S8 V
emerging markets have no problem with funding. |
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