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发表于 2011-9-17 13:16
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Current situation
5 R$ z% ^7 o i( a The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% `. e5 U5 Y) l6 {4 X+ R9 i
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! ^) a7 a5 |9 Z4 W- P; v$ r+ c
impose liquidation values.
7 O( y* M) W/ G/ |) l In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ o) `8 m6 M* H- h% p( ~. J8 Y: mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( n6 w9 t# v& |& N4 P: R The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' K8 W3 H5 e4 cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
+ x( [: h. z6 R0 _( c9 [) Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( a. `* _! X8 y# O- zSeptember. Non-financial investment grade is the new safe haven.) D1 R) h4 {& @5 n4 U. p& y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
5 G' K+ m' q" v7 }" }* ^7 N. s; ^then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; E, I9 w3 L G. D' L4 E8 O3 i5 X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 T1 c; k3 G7 R( i4 _! `: G/ @access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
J+ V0 G1 N" X$ d3 c# JCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# W4 m0 P: t: R2 \2 b# ^- ~positive for the year-do-date, including high yield.% M- f- W2 @2 G) T; o8 _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ `5 [& V \$ D5 \
finding financing.
% s- F. K4 A; D' n' ?* R: o- | Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 b0 w+ }# m% o6 _
were subsequently repriced and placed. In the fall, there will be more deals.
7 _- |" x( ^$ x- B8 P4 ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, y# `% O1 A2 r" K8 E9 Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were, |* m* ?; r4 v/ U
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
3 z: c; R3 q H! x5 Bbankruptcy, they already have debt financing in place., h- a& n) J: O. K* m9 o5 ] {8 e
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- a3 ^; p6 z ]! A( V+ r
today.
% q, Y- l+ [, g7 J; ? Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ `, {2 h; r& v& C- u6 S' _2 x
emerging markets have no problem with funding. |
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