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发表于 2011-9-17 13:16
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Current situation
$ B7 i2 v8 |7 ^/ w* j6 I The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( i% [" n# u9 i1 ~- ^ V u
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" i4 @3 r+ F r/ N, ^" T$ ~
impose liquidation values.- r9 r& w8 m1 I6 k9 B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 Y; m% W3 ]& Y4 WAugust, we said a credit shutdown was unlikely – we continue to hold that view.' K# _5 A3 m6 B* Q, I+ ?. @$ z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' ]# K9 C8 r1 Y& ]3 r& m4 ?- s
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." o4 j! o& w1 C9 y) l1 a
: ^& ~0 `1 G. G4 ?- j9 M( YA look at credit markets
) u% O" N$ @) l0 x+ e4 b6 d% H Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 Q6 B: _6 ?8 G& L3 p! GSeptember. Non-financial investment grade is the new safe haven.* @2 G3 ~' r7 b
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: [! I6 R. Z8 _9 Bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 F S* ?" D4 E' n* c) Xbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, [& p6 J6 N1 x" {access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ I/ ]& `/ Q2 ^; e' l! U% i0 r8 e
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are0 t- I) Z0 H! D7 z
positive for the year-do-date, including high yield.
6 W+ Q: T- f$ x' }1 R Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
8 q" M4 H# U; a& {$ tfinding financing.: `) j) G+ y/ r( T
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 a E. Y+ v, A# i% P0 t
were subsequently repriced and placed. In the fall, there will be more deals.
- M$ @1 @) Z6 h. j6 X9 \( Y$ ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 p3 @! ~3 H z# \7 Q' qis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ V# ?: I- _; D$ `( }) ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; g7 ]( m8 j) U
bankruptcy, they already have debt financing in place.; Q% G( M( _2 a* V* x* P1 B- _3 q
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" N% p$ D, s) T: l
today./ [" R) ?2 W! G, V/ J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 O( h5 g1 C. v3 w8 k3 W H% Temerging markets have no problem with funding. |
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