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发表于 2011-9-17 13:16
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Current situation
" N) X# m$ h& z5 c: D0 m) ?3 r& K9 M The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
! I& P8 w6 q0 ? K8 cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ g3 @2 z' \% k( F L' ximpose liquidation values.
, D5 ?/ v& F; H/ m8 ]. O8 }. u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! J: U: L7 x+ t/ B4 w* w. Y/ j
August, we said a credit shutdown was unlikely – we continue to hold that view.% ?. }7 H9 Q/ c0 b& D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 M) y& C/ }' b9 `) `: o" rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 \7 V! z t7 p0 N) u1 aA look at credit markets6 ?# G, Z/ ?" h. Z1 C7 z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 B% L) V- `: M/ d
September. Non-financial investment grade is the new safe haven.! ~* Y: ^) Y$ U, Q* n
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 E! h! U! H) V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& a+ `! W# J5 X2 H1 Z: w4 lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: }8 @3 g8 y- W2 b* {
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, z2 D1 j; }! T5 f/ \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 _* x; B( ~$ a* X/ U6 {* c
positive for the year-do-date, including high yield.: h6 a/ h2 L+ Y2 e- t4 ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# }- A; {. c8 {# {$ mfinding financing.# f' p8 |2 a, D& Q/ ]7 q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" O$ h+ y7 ~, S4 ]- _! a2 H; h+ awere subsequently repriced and placed. In the fall, there will be more deals.& p! ]9 ^. f- T5 A7 V
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 l1 z# o0 g8 Z' c' Q' B/ o( j" Qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ H2 S* ^% S: `' Q- X) X
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. m4 t/ e. f0 _: M
bankruptcy, they already have debt financing in place.% U1 B j' z+ v" ]
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 T+ ^0 n8 ?- t, Y6 Q% h- z( Ttoday.
& S+ ^3 g' \7 d3 u( K# q/ q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, B9 p% w% i- x( Vemerging markets have no problem with funding. |
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