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发表于 2011-9-17 13:16
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Current situation
" Q7 q0 z1 Q e; | The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long i( v, e$ v5 l+ W ^# x! ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 z$ d, U. j4 F: ^
impose liquidation values.
* M ]% T* Y# F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
2 p" Q" I8 `7 @2 a7 yAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) C/ G1 w7 |) n0 [ ^8 g; \; R The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension) C, k/ D. p$ U! ~8 s
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., w7 p7 `- L+ t) S
$ Q$ M* @& @4 oA look at credit markets+ y6 Y/ f# o% S- M1 Q1 u4 t
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 n2 y: f6 l0 c \
September. Non-financial investment grade is the new safe haven.' B" _3 G' A8 l! `& ?( o
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 n8 m8 o L3 K3 M! Dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 ?; h W9 h6 {8 cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have T S7 J. p4 X2 s% b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ }- o" o9 C. K( x( |( m, d ?/ U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# l2 T$ N$ G4 o: Bpositive for the year-do-date, including high yield.! R2 a- y$ H. |' h& ^2 B1 M J
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: |% g/ I8 x0 \( Z+ Rfinding financing.
2 u8 R: o6 V" S. B) R$ @* `# e Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# s4 K5 r4 m. C- \were subsequently repriced and placed. In the fall, there will be more deals.
8 d# N* n _3 b5 o y' x+ ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! G0 o* t' G/ o: H# Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 s* V9 b( c5 G) l( k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! m" ]) E6 p* rbankruptcy, they already have debt financing in place.& [% G8 N, ] T
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ \' ^; v' m9 y& g+ Dtoday.
9 w" q) J& V: O# O/ q( ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
8 L- V) e* N8 _# s( r4 S, semerging markets have no problem with funding. |
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