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发表于 2011-9-17 13:16
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Current situation
' N6 c; `9 |+ S. |, E% ]( c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) k9 Q- W6 ^4 e/ V8 Ras funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ a" j# e0 W+ H# Y7 O: Qimpose liquidation values.$ r2 X. p) |" p# Q g7 V) A3 S) j
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% S) l" P; b" h; ~, F9 qAugust, we said a credit shutdown was unlikely – we continue to hold that view.- q$ O' K8 Y% u6 f0 a
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
* q' d+ Y9 F* z! s$ f' jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: `1 F0 }- M0 X# T: M
$ @6 O+ b8 E- @8 |1 y/ I
A look at credit markets
) O5 \6 `9 }* I0 `, T Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 w0 n' S# c2 e2 \ G8 S* F
September. Non-financial investment grade is the new safe haven.
' c% D3 s0 H% l" n( ^+ R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; Z. c: s# }1 F* Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( \3 w. @5 ~7 L% _. a. pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- A6 [+ ?8 `; `' r" l9 T8 }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; S; t* E8 c9 N8 Z) }! {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; A! c1 C( b4 _
positive for the year-do-date, including high yield.3 }* a3 v' `/ _. W* r
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, b% W2 Z3 U: S9 Yfinding financing.
. v3 D G/ d2 {0 H* l& m Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 {6 D; H6 _, V& ?9 X7 H" [were subsequently repriced and placed. In the fall, there will be more deals.
5 Z- n9 T2 j$ ?, B" A' o& ^ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' ^; I6 Y8 x0 u1 L) [" O" k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! {" r: o7 O8 d* Wgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ O' T! A4 w+ M5 S! g
bankruptcy, they already have debt financing in place.8 @% y% _+ l. m( x1 n# t" A1 x" R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! ^$ G, N/ S+ Y+ l
today.' q- j# l, `0 a# d3 J
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 I% F- h4 @7 t
emerging markets have no problem with funding. |
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