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发表于 2011-9-17 13:16
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Current situation
8 G p& H8 ~* y# `! g+ X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. D2 |. i, F1 T% w
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may8 W0 |5 T' L5 a; Y8 _/ q
impose liquidation values.
- M: o$ ]: U' z x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 k# U' q8 E# B! I" m
August, we said a credit shutdown was unlikely – we continue to hold that view.
, B3 n! \6 ]8 c7 E* J3 a- _1 t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( N& j# K* F# A* y9 @* }+ A tscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; Y: K7 W; P" U0 T" E3 C. r: QA look at credit markets. N9 d* ^+ u' A h. j' r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( F3 k8 g) {8 q& ^
September. Non-financial investment grade is the new safe haven.
! m2 l/ g3 r0 Q& U High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ ]+ X3 s1 S& Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# `6 C- G! p s. E* r/ Y! I
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' |6 S# h3 Z) ?: d8 y* Paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' i9 j S0 R8 ~( ^5 D- T9 C; f5 i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 f% @. W `* ~7 x) `. F9 H9 Apositive for the year-do-date, including high yield.; I5 t) K, H* g2 W+ R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 E( D8 _' g8 h' m* w, |- t$ y
finding financing." X+ J8 R. \8 A8 ?8 {( p+ r& U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 ]; z0 @+ C$ c
were subsequently repriced and placed. In the fall, there will be more deals.
I' Y! E0 V1 {, }& z% f Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and4 f& g: D% _3 ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. T1 O4 R/ c) n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% B$ y0 j5 }- e* l6 a
bankruptcy, they already have debt financing in place.
' [1 X* ]5 a% O European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! v G9 p1 p5 q4 G, o3 ?( k' dtoday.
! C! m$ E6 u3 n B" @ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 U1 q; G3 z- z+ v0 h
emerging markets have no problem with funding. |
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