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发表于 2011-9-17 13:16
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Current situation
7 a' B* W* C+ P9 } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long. ?1 M. ~# @/ ?
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" m# C. y& G7 ~% Y+ Nimpose liquidation values.
! [) t# v F+ _4 g9 }! m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 e: e# O a/ G4 r5 uAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( @/ o4 O: B# K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 M6 d8 M# F) J$ Z Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% a( ^, r: V6 ^( ]# m9 M, a
. m3 E1 M0 ~. a6 z0 H/ c
A look at credit markets
5 \2 P0 \8 C4 F. {2 Q* V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% S( _1 m# \4 S8 [0 e* ?September. Non-financial investment grade is the new safe haven.
9 F2 e$ o' W# _6 A' I! y8 t* M High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; Y& O/ u% K0 ^- f" g6 I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% f' @) ^/ I* b& m* Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
5 D. I1 J2 Y, e6 l$ b: j1 [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 i+ |0 |# g- T5 vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& Y! C- n& o5 cpositive for the year-do-date, including high yield.
2 m5 \+ y! N' C% l/ T. r7 x Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ o6 C9 {0 J! i6 i, G1 ?( F
finding financing.
$ F) T7 X9 X3 A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ J# ^8 f4 j/ V7 Z, iwere subsequently repriced and placed. In the fall, there will be more deals.2 o8 E+ x" N" b7 p! c0 H0 r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and* ~! T" Y4 \! T8 t
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were8 p4 X' |7 u0 @; A+ W( ^6 R
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 g, |" {! a6 Z& p- I vbankruptcy, they already have debt financing in place.
5 m; T- p* |) { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ |% F" x! w5 f1 A1 S% Itoday.
7 ?+ t* _9 j$ m5 p Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# I! {$ Y: @/ l u
emerging markets have no problem with funding. |
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