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发表于 2011-9-17 13:16
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Current situation
7 v! ?) e( X: i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
^' @% i, t8 O2 D6 y( n3 H$ U) q7 Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, F6 f+ t0 b0 u$ j, ^
impose liquidation values.' B$ m5 m( `, P
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
, |: h/ ]! ]$ t; D2 H1 a3 f b6 Y6 nAugust, we said a credit shutdown was unlikely – we continue to hold that view.2 D% ?5 J& ]4 U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 V7 P$ `6 a- w, l% o+ cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
/ @- J+ o1 h3 B, g; G) e Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 h$ k/ [/ O2 r, Y. u& P( |
September. Non-financial investment grade is the new safe haven.
4 m0 `- N) z G+ a$ R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& A- H8 B9 J2 b: }" e$ O8 _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( R; _) ?) R- y' Q8 q7 `4 o" u, u2 {billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' \0 w2 c9 Q" l1 _! {$ _- f" Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 B# O y. m: |3 k' d. m( t& U0 B
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 m& h0 V3 [ ?7 ? j$ O0 K9 H
positive for the year-do-date, including high yield.
X9 \* W7 B0 b; C' v- j6 N4 w8 V Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, l {: z/ r7 A# O4 s/ w5 X# Q
finding financing.; F: L$ j, e9 t+ o5 @" N
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
, ?1 g. n6 d: Swere subsequently repriced and placed. In the fall, there will be more deals.- s6 O3 o- {% w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: X2 N# r/ N% X1 ^
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 i5 s @( I% n" r: Z/ ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 a' T" @. `* M: U6 b. _; X
bankruptcy, they already have debt financing in place.
L. J9 G6 K$ R1 `3 I: E European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 n/ @6 Y+ l( A# b. ^1 o3 g) W5 [
today.. i' T. T; Y9 O% P# W$ b: e! J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
L5 [$ U' C* C; xemerging markets have no problem with funding. |
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