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发表于 2011-9-17 13:16
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Current situation
5 Y" m9 t p! H: R$ L The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ w$ Y: T* r0 V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% N* m+ Y* Z: {- L, k0 V, }) a3 w: E- Limpose liquidation values.
& l8 s/ l9 h; {2 v: n" E In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 h* S% }4 M! O- c0 [: DAugust, we said a credit shutdown was unlikely – we continue to hold that view.9 V5 E8 H$ G' c( J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 y" p) i4 P8 }2 L5 Z+ o, c! L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 e% e1 L, u. F9 f. e. {/ t. g) m
5 L* G: _# o( R, KA look at credit markets
/ C$ N0 E( d& N1 \4 |& F0 z6 e& @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. Q) _5 _% t6 P S) H
September. Non-financial investment grade is the new safe haven.$ Q, Y' ]; s/ a: s* c
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 s6 x& e1 x" _# ~2 F( z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 Z% ?- N0 k- E& k- W1 x0 ~billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: W7 J0 S% x4 S2 H- j* P( P
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( W. P# w' f/ q4 |* n' U- E
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% D0 T4 d& h6 h% [' Epositive for the year-do-date, including high yield., Q" ]7 f3 k" x. u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 u! I, n- M: [$ q1 Yfinding financing.
$ l: N8 Y$ H1 U5 R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 B4 A, Y. y' J* t
were subsequently repriced and placed. In the fall, there will be more deals.
8 C9 j8 @$ ?, Q9 g. K$ ^& t, u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 Y. h+ S0 \# V9 ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
+ |- ?# F2 |0 P! \" H1 igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 k3 G! N$ f/ Q+ U1 f' W5 {bankruptcy, they already have debt financing in place.) u+ A# j4 @/ B! Q- Z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# M& v; M2 C* d$ }- l# f7 U, ctoday.
" r# G O$ {: s Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ e6 B* X( _5 femerging markets have no problem with funding. |
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