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发表于 2011-9-17 13:16
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Current situation
4 `- k9 B/ `* S9 d. ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long3 P3 P) `( p0 ~& d- G' I! {. I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; U5 ?1 B( O& v$ o7 e! m: T
impose liquidation values. U& S. p1 `2 g; X$ w* g
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' q3 f6 }7 ^6 |7 U4 eAugust, we said a credit shutdown was unlikely – we continue to hold that view." k. `: d1 J9 v5 }. z1 i% S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ ?3 Y" a; d& {3 @* E. F+ S [
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) x, ?* l, i `
/ ~+ l$ Z% ^9 O9 _& m! X4 v# w/ x1 p- VA look at credit markets
. ~7 R' K1 C) @2 ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 ?2 @" G/ K3 u5 Z
September. Non-financial investment grade is the new safe haven.9 v# k, I p0 S3 C* C! a
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 D9 J: S$ _5 P: Qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 f5 h q& J w0 Y: ~0 x" p% W% G* Pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 w' I# S. F5 k; h- n
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; M2 ^, O5 j2 {* z! C6 S& v& C
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; A6 w( v. g8 |! ?; p- o, Wpositive for the year-do-date, including high yield.! K# e4 J( U1 V# o& e
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# n) `6 B5 K! {' W* `. L# k4 V; v Bfinding financing.3 W6 t# k7 ?. c _
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ }+ w* O7 y0 s0 d6 K/ U5 W
were subsequently repriced and placed. In the fall, there will be more deals.
# H/ O/ Y% x/ V6 J& e- `& t, U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. R* |( Z4 P4 W- g* {, l" X
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" m1 }( ?) S3 X" m7 t$ E& A( f" u
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 U0 z6 J: N6 H! ^0 o$ I5 ]$ i
bankruptcy, they already have debt financing in place. E* }: o! ]8 T* A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% S9 X' `( }) N- i! f; R( f
today.5 a* o9 z1 B: ]/ v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 H- T+ t- n U
emerging markets have no problem with funding. |
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