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发表于 2011-9-17 13:16
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Current situation
! Y6 N" O( p' c# _ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 U7 b# U6 f8 j) n5 Y7 P+ k
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! g! E, f1 k# I' F, k" k% s' ^: Y# g" h
impose liquidation values.! q8 G, ]$ F, j; k
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( b% M% b/ k# Q8 mAugust, we said a credit shutdown was unlikely – we continue to hold that view.
: n# O. }% Z4 {7 D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 T) i# s2 r; D8 hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 G7 j& F" ~/ i& g8 R% J0 ?
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A look at credit markets
- k; C& E( b! L+ b& \% @* }' Q8 R Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% A& e. ^5 c1 \7 m
September. Non-financial investment grade is the new safe haven.# o4 u" J+ K; t: h1 x. t
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
$ T" s( y- t. u% ~( B* y! L Xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& v, e: i/ R% W0 C( L/ Vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 k6 t0 t) v* D. X7 Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 b8 j U4 x: h. w2 dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: |: O# n8 k* T0 l7 I# }, D0 u: `positive for the year-do-date, including high yield.& b9 P9 x8 x0 w J5 `& \9 J0 i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble+ X8 b- I) ^9 E7 \ Y, o, m! e* _
finding financing." X% h8 z0 P' o: ^, l3 i, r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
W' z' ^' M- Awere subsequently repriced and placed. In the fall, there will be more deals.
' ]* f+ y2 q3 l% C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 y7 J8 E5 g$ q& @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& S6 P3 `2 `7 G' r8 o! lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ l/ {* C4 }0 y6 T/ ~* h( c! G
bankruptcy, they already have debt financing in place.
8 @1 m. d$ j/ J9 @# q# Z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 n5 s. l" @/ z- c k
today.6 ?- a+ a) d6 R
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 ?' k2 o) `7 ^2 Z9 }0 O# W3 V2 kemerging markets have no problem with funding. |
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