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发表于 2011-9-17 13:16
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Current situation
7 S) V9 m- W( T; z; a The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 X! C3 c. _# r3 T" g9 e& l/ yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" J" Q8 Q5 `- p g8 e3 J& uimpose liquidation values.: o, i2 ~+ t; Q+ f4 p, {5 T$ y, r
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 o( ?! Z9 t8 l5 T1 r
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ _, S( x* m% `7 k The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension V9 E7 F7 j. J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- f' `/ l# W& M
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A look at credit markets
: N# B$ k/ \& F. u( i) }1 k7 t Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 v9 T6 Y7 G ~1 ^! B' Z0 rSeptember. Non-financial investment grade is the new safe haven.
2 S3 J3 Q6 K A- U- i+ [% t# X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
$ V' \; f9 F3 o: q# J( ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ ?% Y7 ~5 n. F1 [4 ^) o6 t
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! U7 T( X% {7 z/ f. l5 faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: W, Y" n8 ?/ S, DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% E& S# Z# `* F& C3 J4 n2 c7 b. l3 N, Q5 tpositive for the year-do-date, including high yield.2 L& D# u+ B3 u, r. Z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% k7 R9 t e1 a' v/ l
finding financing.
' s) f$ O2 q' ?1 A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they: ^- B: m2 b; I" j
were subsequently repriced and placed. In the fall, there will be more deals.
, \1 n3 t: z' S3 B Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- a7 I. H3 v8 g* J# Q2 Yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- ?- b5 n8 }' Y) P8 U3 }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. ^; E! W' x) I1 h7 f2 Ebankruptcy, they already have debt financing in place.& Q1 V# F# o- h0 T5 Q6 }* n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 q5 A: C3 a( ~' P/ N) m/ t1 J: ~today.
4 ~& a6 o$ H C/ ^7 Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 P9 T; W3 k/ @5 n7 p) j
emerging markets have no problem with funding. |
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