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发表于 2011-9-17 13:16
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Current situation
7 L- y2 m+ v9 i8 s1 G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ v+ m' _9 \$ e6 _1 Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, t. |/ I; _" G0 o2 Q% Rimpose liquidation values.
6 R5 Q! N D$ X1 Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 P9 ^6 G" \. | Z D4 FAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 P. I. H- O7 Z: ^' b2 P5 }# z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 p" Z! j" p5 ^( {' s0 L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' _: F/ `0 E. [1 I( k9 [/ w
- U, c2 O2 Z. b/ _" Z. X( zA look at credit markets
% W- ~2 O! t Z- K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) }% M) t8 c% ~! ~) z7 `4 H) M9 DSeptember. Non-financial investment grade is the new safe haven.
0 l: M2 r5 X/ o; u High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 j: A2 |$ Q. o, ~* M: s) M
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
$ |4 E: Y1 e& X+ W& _billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 Q0 o" n% i! K9 f# O
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- n3 i5 g; E, M; `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are, F. V/ o' j0 s
positive for the year-do-date, including high yield.
! p3 Y* L$ Q) z. ` Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 A3 b5 ?( f' u" ~; R9 I+ i
finding financing.
: i5 l/ {+ O) m* U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ [2 O9 k- b, {: Uwere subsequently repriced and placed. In the fall, there will be more deals.6 q0 ?) Q5 _8 ]* d( _
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 t: {$ V) L( I+ W: J3 a7 s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' f5 A# }6 W$ S& W; v
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( L7 C5 d, K ~' r8 G3 {bankruptcy, they already have debt financing in place.6 X+ n2 q, }/ |4 P5 \) y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: i {9 L+ w4 Ptoday.4 Z4 T7 x) h% g* _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 s$ A. v) k9 n" d0 p8 Q% M, u; D/ a
emerging markets have no problem with funding. |
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