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发表于 2011-9-17 13:16
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Current situation8 y0 m o7 `) U# }
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& H! K z7 a/ C, Z! h( r. j( H. B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- D) t# a' U6 a5 I V3 wimpose liquidation values.
3 ^* c5 T7 t4 p, Q( x9 I; o In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( c; ^( j/ q: v4 B6 bAugust, we said a credit shutdown was unlikely – we continue to hold that view.# v7 @% X, Z d0 J% `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% `" J1 T$ y* V/ L+ |* x6 Jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 r5 ^8 n2 R' m' c Y$ r' f. F$ W
- y$ g6 S) _$ X( gA look at credit markets
9 M% R$ e7 ^$ u$ e' M# I$ | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' k. r* c' ^# v( b `September. Non-financial investment grade is the new safe haven.4 g. G3 k" P* a! Y7 a1 }4 I4 {( O' m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ n4 d% L I$ p u5 x' O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' a; D f7 v8 t! G& h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 N$ W4 r% a; N$ Y4 x3 Haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade/ }* s/ A2 A1 l1 z! g; I
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ a O7 ~9 |. Q% \ f- Z' O: I. ypositive for the year-do-date, including high yield.5 y: _4 P6 j) Q: m+ i+ Y g s1 c
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 U- x1 \/ G) p7 n7 J; R) h
finding financing.
3 e) q7 [- V4 T! p3 H- e Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) q# z1 w; j* D4 k6 |6 C0 @
were subsequently repriced and placed. In the fall, there will be more deals.
7 v( X* I. L1 v9 q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and& }9 P% B ?, S2 z c. E
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 P' v& A6 ]) a7 W
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ B# \( l2 @/ J& U0 J- Bbankruptcy, they already have debt financing in place.
4 D5 u+ T! }2 t8 e European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 A( c, Q* b. ]1 H( w/ }* L
today.( S# I; X- T9 t; z$ {
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 b1 C, s6 _: B" [7 p. ?
emerging markets have no problem with funding. |
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