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发表于 2011-9-17 13:16
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Current situation
" ~* m6 O, C0 [( n$ j& \ A$ o- n The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
4 R8 Z; R1 k& las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 R6 E/ {' y5 d' R/ W; j
impose liquidation values./ l5 i: l$ M9 T2 _5 H0 [; H5 `/ N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- @: v& Q- T' i5 d0 @3 ]9 x3 y8 s3 JAugust, we said a credit shutdown was unlikely – we continue to hold that view.
# b( L0 m7 b2 O: f( S+ _ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 r, r, O f' rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
# @) A' V2 ]* \ M. q1 T. h* _8 f8 I- N7 g/ K9 H: w0 w/ z
A look at credit markets$ k% w C5 w5 U7 _' t7 r1 L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 y* t9 |0 {) Z7 F) cSeptember. Non-financial investment grade is the new safe haven.9 S7 x3 q. H$ G% {4 S+ G* m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%+ H4 p& R i v5 \
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ H+ ~* }$ o4 X* ~. ?
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. Q) g' A* c, f6 p5 M9 B. k5 I
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" e# q* s( [4 h8 u* vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) |: K3 @4 X& v: V: i
positive for the year-do-date, including high yield.
( d ]8 G- ^4 f; B: } d' U Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) A" I! B/ J, k t+ B1 ifinding financing.
3 Y9 n' Z: x1 l! L! f$ h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 a) I* V( M2 {' a
were subsequently repriced and placed. In the fall, there will be more deals.
; a% a# y5 d# K( G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% ?& V) w6 ~& O8 L6 f9 J6 a0 i' v
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) T! V1 d/ z3 N6 `5 v6 u. D1 P
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( p0 M' a( ~+ Q( E5 `2 V) vbankruptcy, they already have debt financing in place.
S! [) Q4 }0 g1 w4 S European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ v- X/ C" x! s1 C3 I
today.
/ c3 y4 f6 h0 ]8 [! |4 K' n8 F Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ e7 x2 i. U) I3 I+ H5 ~* t
emerging markets have no problem with funding. |
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