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发表于 2011-9-17 13:16
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Current situation
5 i, a `" ^- V; f) @8 S The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 F. H6 Q, X9 R" v6 c0 x- Y8 Y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may V2 I- J; U( S' N& |: w6 B) \ P t
impose liquidation values.+ X. d* T7 R0 B! C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# g% n! s- U" J4 V+ sAugust, we said a credit shutdown was unlikely – we continue to hold that view.& _/ F; h& J7 J- x/ z0 ^6 D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( }4 l! x/ u0 J M) d4 qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. g4 ^( p8 L% y) Q
+ ^8 ~. R9 x7 B2 X% v- g
A look at credit markets' c& {. z9 P# J1 G( @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 V; L" \- X* W( l; D$ A5 L' iSeptember. Non-financial investment grade is the new safe haven.
; r' h7 V0 U8 R, r! l3 ? High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! @% b6 d+ Q: @* Othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 o$ j3 Y9 `$ I/ o$ Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! C( ` m- {- D5 yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 Q( a! S$ A1 \
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 Q. x& u, L# l7 |6 j0 ?8 s% e
positive for the year-do-date, including high yield.7 R' w' U( S! R# c% c9 @, X% I1 ]: h
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ ~) A0 X7 Y: k; V6 e3 n! q
finding financing.% [' Y1 W$ J6 q* z# R
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& B1 }2 X! k$ h% R3 ?, ^
were subsequently repriced and placed. In the fall, there will be more deals.
- S1 | M/ D( I Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' c& e3 J( b/ ]4 mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* @1 I1 H" J! y& W+ H
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
l' [# G% O9 Ebankruptcy, they already have debt financing in place.$ K/ M [. k$ y, |9 x* h% y6 j
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 i, V$ Y! w0 u. u3 w; ktoday.
1 O% R: F# P+ W) c Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: q' v) z# E7 g5 r
emerging markets have no problem with funding. |
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