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发表于 2011-9-17 13:16
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Current situation
6 f2 r3 i- {0 F4 U2 r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 k3 b8 j7 t0 @/ c
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# j+ D/ N" ~% T3 q: [2 R4 [- B6 n
impose liquidation values.
4 j1 z! G$ O3 k/ y5 ] In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* L" m& V9 ]2 H) k2 ~& T }; L
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 c- `$ o: l2 B9 K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
p8 N# n5 p/ |6 U9 U' @: Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- G" @5 V" n9 ~$ ]5 r* ]6 F' qA look at credit markets
1 C+ i% ?& y: {+ o+ a: q5 }% v Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 Y; j1 s6 j7 A- vSeptember. Non-financial investment grade is the new safe haven.4 H# Y! W4 \, L, g/ d$ Q
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ n0 o1 ~: E& y8 w0 L# H6 dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 K9 g: C. j' d" P7 O
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. e% Q& a% ?% T6 c% H
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 m+ C1 E# m4 R: s+ G" ]
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are1 \) L: z5 B4 V# A/ B/ t" [, F" L
positive for the year-do-date, including high yield.
* {# l/ s: w w# z6 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ c' j1 Y6 y9 ?' E& hfinding financing.- \) T+ U8 e# P4 q) E" G7 v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 G, O3 A; A; M. c0 X3 X K
were subsequently repriced and placed. In the fall, there will be more deals.
s6 w; a4 Z) `5 X- _6 A Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 {% ]4 h) j# _8 mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 ^# |0 P# X4 W& `8 A" u
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( h% U- p0 Z0 G' K# S" w8 |# Q+ Z
bankruptcy, they already have debt financing in place.9 r; S1 F" @; T7 C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: ~- P( Z% B. [8 bemerging markets have no problem with funding. |
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