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发表于 2011-9-17 13:16
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Current situation
# R8 S% i, U. k0 L* \5 w2 ~3 Y4 h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: h( k, l# c0 A$ l6 p# v4 S, O, Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, k( L' E G% Rimpose liquidation values.
6 @0 \/ F& | P' p1 Q% k" K In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 D8 z. H* H$ o9 _- G0 c
August, we said a credit shutdown was unlikely – we continue to hold that view.0 y/ b4 t1 ?, B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 k1 L$ h- @; ]scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 D- d4 C" m# r5 B6 @
" n3 F5 ?3 W/ D, I$ |$ D& LA look at credit markets& R% \% c9 n. N
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, ~9 B9 \1 m" q' eSeptember. Non-financial investment grade is the new safe haven.4 |% T2 U- y" N1 [0 w/ U, {3 |
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
d, h+ d- ]7 q: V, _" y P& ~ E2 Qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# ~: D- e2 k+ r) w: I3 @8 ~8 V0 ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 z$ C: [% W! E8 B) T( g6 C. L% B* Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* e7 ?: C( U7 J6 x; g1 Z4 sCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' W4 t) _; e& V7 F, [5 q) Epositive for the year-do-date, including high yield.
/ N. X8 X, P) d+ y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. P2 I$ d1 Q0 Z9 dfinding financing." Z6 G9 ^2 z/ D+ n9 A }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: H- k# d( G1 k i6 v7 ^% y/ U3 @were subsequently repriced and placed. In the fall, there will be more deals.
' s8 C- i/ a# F/ J, |9 `# _( }2 }; T Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ N5 j: _* U; v6 b$ x8 g0 `
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% O6 C) E& S+ Dgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- h3 D# m. @5 a8 v5 S9 s! ]bankruptcy, they already have debt financing in place.
) x* Q- B, C* c7 N/ e7 R European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
3 X6 h7 i/ K4 }& l& S/ Z; j8 atoday.
0 r$ v" A x: b6 r2 I) R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 E. s; J4 b; r3 P: iemerging markets have no problem with funding. |
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