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发表于 2011-9-17 13:16
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Current situation
' o3 z( p1 O v( C1 N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, s! _& ?8 q* C( o! D3 P4 d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' d9 p: o' P8 R- u( O; T" Oimpose liquidation values.% \, g8 U5 o+ \# m& S: ~# E
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! H1 j) d# y* }August, we said a credit shutdown was unlikely – we continue to hold that view.
+ a* e7 W2 v3 d v9 c1 H The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: \# H. h8 z, `: u% Q5 r. y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., }: `: u% U' W! O% `1 F! L/ U6 v
2 v. ~' \# d1 hA look at credit markets' G* w; `. p, ?2 e' ?5 K" ^
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. D! `2 q& L6 _8 `( L+ v. eSeptember. Non-financial investment grade is the new safe haven.5 j3 R; a! p/ n
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 M9 @& C2 M3 a$ b3 q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 X v, g( y) ]. Z+ z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 h0 d& I# g+ ?; j9 u1 m' e$ r
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 Y1 x, z9 t7 K; j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( q3 T h& F& d. B2 N5 z
positive for the year-do-date, including high yield.2 X e% `8 A1 U. u, v9 W3 m: g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" t, ?: q- p, @: Dfinding financing./ T3 u( [, q" u# H/ |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- w: W1 O" D& d* Ywere subsequently repriced and placed. In the fall, there will be more deals.
, q6 G' E3 f" n, q3 s6 y8 c# S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 z8 v d* k/ D% m
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 p5 u9 Q; z5 J% vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 b" ~5 F. A; c H" ]bankruptcy, they already have debt financing in place.( J+ \; A c; H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& X( }$ ?% W2 y1 b4 G" Y
today.* L9 u% C) z$ P/ W, D
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- a$ |/ N0 _/ b* C0 Q& R
emerging markets have no problem with funding. |
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