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发表于 2011-9-17 13:16
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Current situation
+ [$ ]1 c6 T. B5 K( {: N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; L9 t5 |1 O* t! t+ Bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* z9 O" C# c1 T3 [3 d# I/ F5 Wimpose liquidation values.+ x! [- V o/ e% G, ?
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ r% C9 r' i8 |4 D, A' T* M; DAugust, we said a credit shutdown was unlikely – we continue to hold that view.
$ l4 K3 C1 g; k- Q1 t( q+ s' o: P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% H( D L# h( r' v- Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& x, M" l2 U$ X$ J( I2 c
+ W" M( t5 x2 x
A look at credit markets+ b, O3 U7 ?4 b$ H
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( j$ ]" ^9 r( ~3 h: V9 ~September. Non-financial investment grade is the new safe haven.
' B o: r3 C) v2 b/ c0 a: P4 j High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 w4 {5 g; c# ]7 F$ t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
+ s: @/ l0 j5 i: m' @" i3 dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. ~' b* P. p1 k, |
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 D/ }/ Z! c; k4 R% G$ zCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% d! U# ^6 E2 Y7 e: e
positive for the year-do-date, including high yield.& ^, d% {# Q% [8 r
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& W% U0 R2 A( \% mfinding financing.
# y! `3 ^* X7 g+ T; p6 @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 ~& l) }2 ^/ R) D! I: ?- f6 M
were subsequently repriced and placed. In the fall, there will be more deals.
7 _! c2 u# B$ W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and0 ^! Y) Q- D/ V: u6 V! {
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. s' c: T8 e& h8 c- E" Y: }' G1 t
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! U- l- F& l6 h3 D lbankruptcy, they already have debt financing in place.
7 |( u' ~3 k8 M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 j2 d5 `$ q% y5 O; ytoday.) s+ O6 p6 S6 [% t1 K9 S. ?8 Q i
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ ~4 u! a" P3 k2 G* j( D
emerging markets have no problem with funding. |
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