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发表于 2011-9-17 13:16
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Current situation
1 X' `# W7 s/ M$ o4 C. x+ S The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 X3 c- |" @7 y+ c8 U( d8 N Tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
d* u8 C; m+ E8 Gimpose liquidation values.
4 ]7 _0 }8 q6 B# F! v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ G# O! B* a! ~3 g6 b% ]+ VAugust, we said a credit shutdown was unlikely – we continue to hold that view.! S" d0 v# J& N" \# j: \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( v9 v/ J7 T: L5 l I
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) `3 \$ a- a3 m( ?1 R" F3 W3 r
6 E' C1 u: i9 B: d3 ~/ }* LA look at credit markets( Q; h% ]* d# X$ ~0 { d/ ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 {& D# N7 w! n$ E1 p, ^0 vSeptember. Non-financial investment grade is the new safe haven.
* E9 Q+ H( G6 D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. K w. n8 w4 g$ @. }
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ o$ m- c) d7 m" I) I }# f! c
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" P$ y+ x+ N" b* |6 _. D
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ x7 z4 u1 T+ P+ @: m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
, B/ \7 F6 v1 i5 Q" _/ k- f# f: i: jpositive for the year-do-date, including high yield." {) g/ p: M" g- I% \
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& d1 X# E5 O" }$ R! B
finding financing.8 J6 w5 {) M: J4 @. m
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 g1 Z- N; T N$ t& i1 X
were subsequently repriced and placed. In the fall, there will be more deals.7 s1 P) |' I# X3 z' C# J1 Y& I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ F6 k* b. s/ {# a1 n7 |+ q7 s1 tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" W4 Y( w# _+ D- Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; ?9 R' Y0 r7 I* H H3 |. j
bankruptcy, they already have debt financing in place.* s# n: a; p1 e. ^4 C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 P: k. G# O* N5 h0 p: Y
today.
' ?* X T5 J3 G7 @& W9 ~: C Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# l# f8 ^8 U- W! n" i3 D
emerging markets have no problem with funding. |
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