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发表于 2011-9-17 13:16
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Current situation
0 r+ N! H3 M6 J: n/ I The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ m8 W& K) B0 bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ c P/ \- C. g2 B8 N( timpose liquidation values.
0 N' k! |' c& Y2 c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ u5 d5 L: c" X1 \8 f) w2 C/ C6 |
August, we said a credit shutdown was unlikely – we continue to hold that view.
; U9 F, W h h7 ? The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& y" f3 }+ Q7 ]+ o! x4 T: k3 f# r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& V! l; S+ c: W5 @: DA look at credit markets5 L) B$ a, q' q% c. p1 O
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 b& W' q! t( X+ d2 tSeptember. Non-financial investment grade is the new safe haven.$ C" t6 x( E$ `) C+ {/ O
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 Z, m2 G1 u. g. E
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 S3 e A; x" k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 R+ o& T, t) n- h0 haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
g+ h' n5 d% M3 p& e# ]( K" r+ c; OCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
( R" V; T# b2 _3 Q2 Z5 wpositive for the year-do-date, including high yield.
+ q% X. b5 c' c5 z3 s$ f* q6 w Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' Q6 j! [: p5 e
finding financing.
8 }4 F+ G5 e/ N$ P7 K- s, k Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* s: C! H$ s8 l- nwere subsequently repriced and placed. In the fall, there will be more deals.6 x% _2 `( D z+ a- F: f b- r: W
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' h7 @* S, ]1 G" d2 @9 `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: G- a3 Y. u. D }+ \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" {% J; U+ m0 f1 o. o0 E$ f, S% a( g3 zbankruptcy, they already have debt financing in place.
" ~. }# M& x9 [, ^, F. } European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 \; [. |$ v; Y" O; y6 Ztoday.5 z9 W6 j# y, k# G! h+ J" K* ?
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in Y% p b2 {( G
emerging markets have no problem with funding. |
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