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发表于 2011-9-17 13:16
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Current situation
% F) d2 e% D- x The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: q* t7 O. I& ~$ g6 C# p# n8 k
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
7 w% c8 T( W7 r' b4 D' e( m# q2 d$ Oimpose liquidation values.: E2 g- i: I9 ^1 v) h% m" d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( ` W! h. q/ \. b
August, we said a credit shutdown was unlikely – we continue to hold that view./ W. S; o: ?9 B* _* |2 Y& ^
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 x' T5 k& V& o1 R" {. g" t1 x/ }scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; L- x+ O% j2 Z, ~, c2 w7 J
3 C# l0 j' j0 X$ e. v" r; I3 E
A look at credit markets" q5 y& S; R1 W7 _, H
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 C0 k( ^. \$ b& i' D6 `' v
September. Non-financial investment grade is the new safe haven.- R& X; Z$ d, w( F( y" b& C- _
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
7 d/ f2 d7 F) n1 y% ~then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ z3 C8 \8 M& D! F! k
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& [+ N0 P% n9 l6 o: Uaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 B t" \: G J" ~+ FCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 L7 B$ M- t J- E3 h' d9 apositive for the year-do-date, including high yield.1 |0 `' D1 Z! _. f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" p3 L) |+ e/ f. ~finding financing.
2 ]/ t) u) ]4 k9 H) K7 w/ ^9 ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 e. U- n/ k4 Ywere subsequently repriced and placed. In the fall, there will be more deals.: m# V. e7 x3 r: }; P3 q# w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 O! [7 k+ Q$ S& V/ ]1 H) p6 X6 xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; L# H) k/ A* `9 f
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& N0 A* J& ~, O( o$ y E8 rbankruptcy, they already have debt financing in place.. q0 ~0 @' ~& l/ ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% T( }. Z$ ?, y8 _, m8 ~
today.' z7 w( x3 c0 w7 W! U5 w
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 \, a) C. H( `emerging markets have no problem with funding. |
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