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发表于 2011-9-17 13:16
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Current situation
' f8 Y* p6 R" Z' ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, E8 v. ^, T- D: ]8 `
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 {5 ~$ Z- U6 J. u/ t+ i7 Y
impose liquidation values.4 N Y# R1 Z% {" w$ G) F
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In$ a* [3 e4 ]& N+ a* P* q* w
August, we said a credit shutdown was unlikely – we continue to hold that view.! T4 E$ Z% _7 I x7 F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 n' W1 Z7 F% Y$ R& i! c2 |scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
0 _3 V7 \! g3 i! Z n' C5 j Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( u3 b* Z0 i- N# ]2 q- D+ p
September. Non-financial investment grade is the new safe haven.( O" B, c3 s9 h9 X# l% ~+ v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 }, S$ g; B- |4 S7 }3 ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ u7 w* ~8 w0 k, x5 q W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 a. \3 Y4 u0 {1 Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 P: c+ {( n& {) G, l. DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 H; N Y6 X) y e0 D: G
positive for the year-do-date, including high yield.
7 t" e7 ?. i( b+ P4 ?& \5 S5 U; S Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% A, X" V! w) t% D) O( \finding financing.% s; A+ |: `' }3 C2 _" P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they a6 l0 f: Q: S. h: s1 P& B
were subsequently repriced and placed. In the fall, there will be more deals.
# R9 ]/ B! \) B1 Q4 B( e ~ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& O r* G) O& m" p( U' Q
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 a; Z+ ]4 J1 v/ Pgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# }- V0 {* J' |
bankruptcy, they already have debt financing in place.0 y7 A3 i1 u2 e% [& u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 @ }5 k" U- i$ K% I! ptoday., }2 I$ t% D( x) S1 F
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; U- C8 z* A O% m- F9 K
emerging markets have no problem with funding. |
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