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发表于 2011-9-17 13:16
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Current situation
6 h% H3 U9 z. L4 e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 o# o, m0 @' I: c8 N6 J) ?$ bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( }4 |" M' z) p- r! N' X# d, U( S) @impose liquidation values.
" q7 s% o0 \# `: D. Q% R In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 c% F+ J# S% I- ]& f; N* CAugust, we said a credit shutdown was unlikely – we continue to hold that view.- i* y% |9 p5 r, `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: O3 O/ V/ H% a/ x0 G7 Y6 u
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( `; c' Y- C4 X* I" a
. H4 h/ g/ Y9 y3 H: {A look at credit markets
5 w- I, X3 e3 S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 e. e% y% v& B C, k
September. Non-financial investment grade is the new safe haven.
$ s8 z% S _- C9 x. ~" S F High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, A- V9 L$ [ U. k2 Y0 _$ y) K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% j7 n# e1 B! v8 ]
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# b8 _7 R: M0 Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 M( E- t9 a$ r1 S' a; C1 d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 d8 C2 J9 z7 O* Vpositive for the year-do-date, including high yield.% r9 x- ]! Y$ f3 h) T, V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 k" Y" n% v X' k! h( u, V S# Nfinding financing.
- ]6 t) F/ F E+ D8 x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ q! X2 }: C1 s' l. q2 {were subsequently repriced and placed. In the fall, there will be more deals.6 F* I, P! _% W+ ] B, ^" d
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
n3 y+ P7 \$ d# E$ C. L7 Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 z5 z1 a0 {8 cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; b* n9 u# U5 o, Y f5 b, G
bankruptcy, they already have debt financing in place.5 m: [ j Y; e' r9 c
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 c4 T+ h5 I7 R; T8 ^/ c. e6 H
today.
2 d, g# s5 y# V) {/ m ` Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in n% z# _: K- W8 \8 u- ~9 n( `: b
emerging markets have no problem with funding. |
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