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发表于 2011-9-17 13:16
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Current situation
, w* T T( m6 G+ B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ f, A h0 M' w4 L; V" H, Y' T
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ H6 \% h/ v4 g' a. H+ e
impose liquidation values.
8 A9 A3 z7 _: \9 `+ Q. R In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In8 Q6 s2 q# a) p4 U' ?. \; n4 [1 v" U
August, we said a credit shutdown was unlikely – we continue to hold that view.
4 S! v" O$ B% i9 {' U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' Y* g( p9 V+ t' j3 [% h2 B3 w5 c
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) L. l6 s$ b! E+ X
! N; R( O$ [5 i& ^. D- e7 |A look at credit markets; N8 z/ F; C# C9 d; o' j# I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. b! r. R! C$ k4 ?$ sSeptember. Non-financial investment grade is the new safe haven.' _2 Y6 [2 R. G7 |1 I. i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! h2 `* G0 w7 P; D
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 y" A! N4 p) H/ s( F- |& N( pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 y, J; O; t# I/ a3 j# Naccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ u3 C* }3 m; R7 C& E a: ]
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are& I8 z- f$ ]9 B$ J
positive for the year-do-date, including high yield.
+ G, P. N. ~4 N" M+ z9 i& t$ S Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, ?) x8 B4 c/ r) R: Pfinding financing.
$ ^7 t, y3 u1 c) ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 a; J% W1 v0 R5 x
were subsequently repriced and placed. In the fall, there will be more deals.
( _3 ^% a4 j2 g5 K" P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: h0 Y, B# d2 j/ D# Bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' L* I- `0 d, X" h1 a' Y( ~going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 {. m' K- B; _7 f9 e8 b2 u+ Mbankruptcy, they already have debt financing in place.5 _3 O2 S* q v- ?
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% F% J H) m# |( ~1 f
today.
% U" E7 R4 Q1 K& _ Y% \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 g2 ]" r* `* U. Femerging markets have no problem with funding. |
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