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发表于 2011-9-17 13:16
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Current situation
1 t+ L8 V, b& Q- V; B! D0 V( U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, \; H' x; @0 C @% `$ E: ~* j2 e
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 ?+ F+ Z; n9 j, n+ Y" h
impose liquidation values.% A- Q: J% e! s" D. s
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 C# T1 ?0 z4 c/ h1 s, @* c! ~, w2 N CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' `) R- Y' O9 u* u& p: a) p The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' h. n7 Q& k" |$ A# l a
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% }; @* W6 ^8 a- V$ M2 I$ Z
1 n+ g( o. X' t4 c# z) p6 vA look at credit markets
& `3 g1 g6 B( x, V5 i Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) ^ E* Y S9 d# b/ \$ R* JSeptember. Non-financial investment grade is the new safe haven.
& p8 C: F2 i$ P! G1 @- J0 | High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" A0 z( G7 h; N- Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 h; t# s8 a' s. a- F& G2 W8 G
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* f3 g: E" g* }( z& U9 t
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 P! h ~) w# [( D" w9 V7 G" R4 _, Q. MCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) c. S9 p( N+ k4 k/ q4 M
positive for the year-do-date, including high yield.$ g3 Y2 E+ }) U) a" s" S: W
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 B3 w2 K3 w7 R9 o+ o+ W' h$ X
finding financing.$ {. T- t: [" Z! m
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 X# a5 N# w( y: J7 z; a) @were subsequently repriced and placed. In the fall, there will be more deals.
/ ]: g' e6 t# w9 b. W Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 I" V/ V) _' H4 `0 I8 U: J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, ]/ {3 x* y$ ^5 R- Hgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 B+ G3 \" z0 V1 H
bankruptcy, they already have debt financing in place.% ~# I9 a: L& \, m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) [2 {; M, B% K- q1 |! b5 htoday.
. p8 h8 X7 C2 ~& r V) E# Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- H' E4 q5 w- O. ?& {* zemerging markets have no problem with funding. |
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