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发表于 2011-9-17 13:16
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Current situation
' G3 H% ^( v* l, N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 `# h R% c- _; |* K3 a" |
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; l- z5 p9 n: g, Z* r3 m
impose liquidation values.% I ~. Y* y F2 H7 F+ y2 T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 k; Y7 G; b' Y7 `" _7 M
August, we said a credit shutdown was unlikely – we continue to hold that view.! C" \, i7 \0 [+ L# e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 }. F0 E' o5 y- }% B8 ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& }& B7 V7 o. R7 ?
- q, f: v2 g; l: H9 LA look at credit markets0 P: i8 `2 H$ j% Z7 i
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: t5 d C5 \/ X* v/ A
September. Non-financial investment grade is the new safe haven.
+ M/ }/ x7 X4 }: ^/ Q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( l7 z1 v- R1 e1 T& {' x+ @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, v) l0 F7 D9 y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% f. ?3 A! C4 d8 h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade7 ?9 }# u+ `0 Y. j: ?9 @. N
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% f$ [! n1 W$ B/ bpositive for the year-do-date, including high yield.0 d- o, z5 h1 {
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- e5 q% J a1 _6 b* D. N/ c
finding financing.: `) k# n; g2 ]" l k8 {
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
* z7 K0 ^6 h; K) n4 k: R9 u" Vwere subsequently repriced and placed. In the fall, there will be more deals.! P- Y" |3 ?5 A2 {4 ?/ r
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& d2 \1 Z+ S: @" l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 t5 K( @7 K- V+ s
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( z' I% G; P, @/ i
bankruptcy, they already have debt financing in place.! @) B& D- q- w: ]$ x
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain* h3 p+ C& W/ p- m8 X4 W- Q+ X# `3 A
today.
3 l o; p3 |+ S3 }$ W0 S6 t3 }% Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
2 A5 Z @1 S+ |/ s% S2 Qemerging markets have no problem with funding. |
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