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发表于 2011-9-17 13:16
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Current situation
9 [/ C; {( y/ C( E* k; u The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" `& O. U$ O4 x6 g$ C: v8 n! Z4 H0 w+ y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may8 ?7 ?4 F' O% y
impose liquidation values.
5 x% e; U7 q4 q$ P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- `' J* I" E, X$ H+ l; PAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 ^: a3 F& e0 ?& M. \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 q* I/ D# I. k( v1 m! kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. Z E- _* t$ p( \( {6 Z
. S/ z2 I: D0 l, {' ~: ]A look at credit markets% U! z7 l- o4 ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 H5 u/ @) U# l8 |. r3 ySeptember. Non-financial investment grade is the new safe haven.1 C0 Q3 i) x* s/ L+ Z
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
~" e k5 M3 g6 P j0 E+ N& E- p1 ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& _" {2 D9 F6 j6 _2 O2 n0 {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! A" Z! H: T- C7 i, @' daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 a& b" z P* f# z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 s) t4 {2 G$ t4 Q+ H
positive for the year-do-date, including high yield.+ p$ w q* i8 l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 J- q3 j A, i# v0 s h3 ifinding financing.
4 X, w1 c% m; ^3 ]2 @ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 F% X; o1 H. J) F" z# Y
were subsequently repriced and placed. In the fall, there will be more deals.
' e( U& _5 `) I d+ f/ b Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ ?2 k6 Z0 t8 f4 X4 _8 W: {. I; y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% G3 q' K' y9 V4 y: u" @2 igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for& c5 g5 h. {' p m" P
bankruptcy, they already have debt financing in place.
0 O/ I8 b! Z/ ^& c& U0 w4 Q* p: [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 w, a' }1 Q! }( z# F
today." g" C& b& ?. W: j: g
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 E0 d4 q$ y8 a8 [4 ?% _
emerging markets have no problem with funding. |
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