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发表于 2011-9-17 13:16
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Current situation
( w* S$ U; G; y. \0 n% K( b" Q3 V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 U' D: c( l; x" d6 V B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# ^) U; ?) M; E( L
impose liquidation values.# y. p- A' I2 b/ X( R3 A5 V, U
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# p: t# {! {2 }
August, we said a credit shutdown was unlikely – we continue to hold that view." r4 ]2 y$ O' d2 X; N
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ l$ u5 N0 J" s" x" N5 l5 A: b1 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: r& F3 Y [3 c1 h: x; E9 v3 e
5 _6 _) n! t6 K' P, a. n8 \9 PA look at credit markets; `4 |# M s) f* d, ^) P( p
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 h0 w: y ~" g% w) WSeptember. Non-financial investment grade is the new safe haven.( M' N3 ^! V: O1 x; q( p" x" `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 B: d4 {: [# z( U: [2 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 D" K! }: b, \2 U) H/ F
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" ^" k8 E) a- Z2 Q$ V2 Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
( _* Z: A6 l* x: x7 ACCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 X& u) y3 ]# |1 V, P
positive for the year-do-date, including high yield.1 v) x# u3 |! Y4 M$ @8 t* V% W
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( @1 D8 U, m9 E# i L
finding financing.! u% d' [6 B5 M, z: k) P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ f8 M! T* D7 \2 L; F; ]0 T4 t. g
were subsequently repriced and placed. In the fall, there will be more deals. [* P2 T5 I8 k+ L+ a; X: \5 G W
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' |# j8 T; Q7 ?/ B; c' ~, bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' }9 ?4 e+ e0 Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 N# V! y( w+ Pbankruptcy, they already have debt financing in place.
1 ~" l/ w) c2 L( z6 Z c1 r" m European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" k) N3 [& Y( M: stoday.
/ q* S' D! [; O+ x4 Q4 W# r, z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 Q8 ?5 u, R5 h0 `; A; a5 Y
emerging markets have no problem with funding. |
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