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发表于 2011-9-17 13:16
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Current situation
8 T P( y! u9 A' ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 V; a1 E/ o/ }) ?7 z, X0 s
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: p8 A$ @! N( U! {; z: O' Jimpose liquidation values.( {3 S2 [7 G" _4 F6 c+ N9 G
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
$ S* i& k& b( g3 p0 fAugust, we said a credit shutdown was unlikely – we continue to hold that view.
4 j* \6 U! ^ K# n% v$ C7 a5 i The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ x- J* X/ D* x& pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 P% T' q/ s, S; V
, I8 P% E5 W- i7 B9 v, DA look at credit markets' J6 c; X" k* @% X4 c, K- h' p
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# \: ~: m5 M) t/ _- R' ?0 |9 |
September. Non-financial investment grade is the new safe haven., M, @3 I0 w. f8 u* y) t( Y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%$ M, ]7 a4 P( j5 S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. b. w8 I$ V4 i1 C, K( t
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 X6 u! t; ~6 t) d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 Z/ ^ L% i: P# X" ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* @+ c3 z! p' epositive for the year-do-date, including high yield.
9 v* m4 @$ I2 F- x( [! I: F Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% X. B, X$ c0 x* Z! @
finding financing.% N+ L4 j6 P- d8 e% `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 X* ~! A5 {& v
were subsequently repriced and placed. In the fall, there will be more deals.' v8 h6 ?3 O" X' K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
+ I# S+ X* u* s# `is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
8 a/ v+ ` H& W/ Y6 a8 f% y1 {+ jgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# g+ w! R# f- v: l& m# D M
bankruptcy, they already have debt financing in place.
# S! ]! O- c% N6 | 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. O/ \7 Y0 @/ R9 k' k6 R
emerging markets have no problem with funding. |
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