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发表于 2011-9-17 13:16
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Current situation
8 _& `- @+ a% F; k+ Y, S" t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ w t8 H4 Q8 P$ c8 {, u N& k! Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" v! k/ a2 ]3 O( _; Wimpose liquidation values.
4 @3 L w/ j: w' x In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: z# \7 c8 w( B0 F/ ^9 e: w
August, we said a credit shutdown was unlikely – we continue to hold that view.7 ~( ]% I, `2 a" ?% C. F9 }( s
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: F5 K- z' O9 d
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets3 A. h; T9 g+ }. ]8 m. E) z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
; e1 G$ U; H( r( D! o# B- uSeptember. Non-financial investment grade is the new safe haven.
1 u! Q( U3 L1 e. F+ n+ q1 w/ P High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% F( Z# D3 n8 S1 y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ z& i# z& Y( h$ A' W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 k% ~3 L* K0 o+ I' b; Maccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 K9 r3 n! Q" R& r" `4 f4 J+ G- n( RCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# T: Z2 X2 Z9 r3 M, J
positive for the year-do-date, including high yield.
7 ~ W) @' C1 A) h0 b$ ]0 q" s- f2 J Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; ?! w% v8 M+ g9 W
finding financing.
8 k- c* @+ a5 T* E- K! n, ~ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" f+ b4 @& T2 u9 } q* F0 S) v
were subsequently repriced and placed. In the fall, there will be more deals.0 }3 [+ w, l) v: E3 p9 b2 h; Q5 ]
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* S- s) D. `+ T# N7 Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 ]1 I8 x" {1 e- J* o7 i+ A" w8 u
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 B) O& i8 _6 P9 B7 s
bankruptcy, they already have debt financing in place.+ S6 X4 X: a- G7 O- O; ^3 V
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
L* G2 l' g# v0 S2 `today.6 g! V Q3 I. y. f9 t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. ]0 \ K: [; a1 v
emerging markets have no problem with funding. |
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