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发表于 2011-9-17 13:16
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Current situation1 G; K, m4 d" ~) w+ V# M
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 T5 V& P7 o+ k6 r2 Uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 l' c# W& ^6 p. @5 y/ ]$ V- ]' Zimpose liquidation values.
5 Z: N/ w4 f( V* d1 P$ K+ ^ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 H* V; [5 g! a3 v# j
August, we said a credit shutdown was unlikely – we continue to hold that view.
& q. f( H/ }* y4 V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ _3 i8 |- y4 k# i6 ]0 A, P9 ~8 t
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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0 r5 J7 t1 k$ V: {* o. |4 x9 wA look at credit markets
3 U0 q& ]- P. B0 q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ M1 r1 T) d2 ]4 s% g$ T4 o
September. Non-financial investment grade is the new safe haven.
1 l$ R; h3 t& D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) L! c3 Q% H* F t4 X0 U1 i% zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 F# w( y% v, S% v$ V" G* jbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
p. Z% j% f* Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) U- k# b5 Q& ~9 K
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: g0 Q1 Z# H$ L; P0 epositive for the year-do-date, including high yield.. g4 x' Q( x2 X4 S% G# V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 W7 D! \% ?: y4 B \) b, A- n; T
finding financing.
; e% \% |0 o+ @' N+ c2 k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 q% D3 |! X7 C0 k% D+ r
were subsequently repriced and placed. In the fall, there will be more deals.
, Z+ N% j6 ~' q+ v5 _0 m* F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 E( K1 S% l4 z; }/ Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 s8 S' T4 Y# q/ Y( ~2 ?, ~5 P3 rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: G. G9 d4 q& ubankruptcy, they already have debt financing in place.- V3 \/ S1 X4 R8 r8 u. [" e, S
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
9 q3 a* J1 P: F2 O4 P2 Xtoday.3 B' v# J" _ o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: d- Q$ `( E x/ I% [
emerging markets have no problem with funding. |
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