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发表于 2011-9-17 13:16
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Current situation; q" V6 f1 [9 }# @! M: B! ^6 g
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- q$ o$ ]/ U- [" f
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' ^$ M: f @" t+ |% ]* a8 l* ?
impose liquidation values.
( L/ {/ k. e( ~# i; y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 _& d Q8 N% ~: Y9 `- n
August, we said a credit shutdown was unlikely – we continue to hold that view.
* K/ h _; O$ ^+ \4 B1 [. c The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 { x9 u4 v( N: {- Xscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& g2 y: K, ~0 l9 y. E& @
( E- G7 M/ h1 N$ aA look at credit markets
0 `1 g( k9 o& b4 N2 W Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 V: R" h. X! U6 r# _& q- O
September. Non-financial investment grade is the new safe haven.
5 W2 \; k" M* R$ f( }1 o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 Y1 A1 c$ }; }0 c; l9 L7 _then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. F2 ?; |) v" q7 N" B* z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have" @2 [7 W3 N1 m! r5 B
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
& F" O7 D1 @& i b3 g/ SCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 h1 Z' X0 X! J9 b
positive for the year-do-date, including high yield.
/ X( n9 J& z* i. u+ j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
0 }3 L; a5 u* d* d9 gfinding financing.
$ w" N( s4 t9 M2 p9 N Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' B/ f/ B8 \. Z) L" Pwere subsequently repriced and placed. In the fall, there will be more deals.2 a t N# _ o2 h( i) \1 V9 J, K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! m5 H' A8 O- s8 S
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( Z+ Z; t, ~1 x* s" W) kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 a" o- \7 j3 Z( |7 E7 _: Cbankruptcy, they already have debt financing in place.1 N5 t3 j; @; k9 E4 O, v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ Y7 j" \5 h- X5 C, s& C( I7 z
today.- U% O5 n* W; K
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 N: A, Q; D8 d8 @
emerging markets have no problem with funding. |
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