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发表于 2011-9-17 13:16
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Current situation3 W3 g! q" v5 w; ]- u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; y- i8 x2 s3 k* ?( c0 m( B0 Bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: K+ Y1 o/ [ _$ z* Rimpose liquidation values.
5 K0 L. e# f2 Q2 X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; K4 k9 Z; e/ W/ a' Z
August, we said a credit shutdown was unlikely – we continue to hold that view.8 O* G+ o5 _* H3 Z9 \6 q2 Y1 t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* A1 C% {" X0 }* k; Q. f3 nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% `9 F5 y% _2 I' n9 e
3 `4 R9 M0 @5 T+ O
A look at credit markets9 I! B1 ~, [- B4 Z$ {3 T
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 U7 r+ N! C* P* Q; @8 u6 uSeptember. Non-financial investment grade is the new safe haven.3 X. A. t6 }/ A8 K2 @3 ?8 B
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* q( w' a; W2 U3 Y1 @ Wthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ i/ t% S6 S& y ?5 m, p0 I
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 P! w1 z& O6 R3 s: r% c9 Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
3 M5 s# r* W" n' T2 X2 C9 R4 pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 f5 d. i! C& y* p' y! \: ^# E
positive for the year-do-date, including high yield." ?# S: [0 I6 z+ h' w5 z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 H6 x) r" h& o6 ~
finding financing.
! P7 C {. a% R7 a/ N: i! U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 K7 }! p' [ U9 D, d5 Hwere subsequently repriced and placed. In the fall, there will be more deals.
" x! P. ^- ^+ l. ?: V8 Z Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& L# M& o+ F Y; L( u* _" Gis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% s0 ?$ [8 Z0 @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 \/ s0 e; H% V; }' Mbankruptcy, they already have debt financing in place.: _2 [. J7 b9 t8 t! i+ _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( C; ~% X2 H" S0 l2 V" [5 g
today./ p9 B, B- B" x
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ f5 i- \) V3 T: k
emerging markets have no problem with funding. |
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