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发表于 2011-9-17 13:16
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Current situation
% B6 o5 N/ N0 m! o, y; w/ i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: E K8 E4 Q% v O2 L* e/ T4 Sas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may ~" Y. V, Y# M( Q4 r' D6 T, H% x
impose liquidation values.
$ E% L$ Q7 T/ W7 B& [% q+ N In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In" {3 w& x- P; v, Q
August, we said a credit shutdown was unlikely – we continue to hold that view.
0 i# K% t2 D3 |3 y* R& Q6 a; C: H The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 H( x z, H2 H, \- X% T3 q- U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% s! j! {3 W5 Q b9 P/ h6 e& Q
5 {+ G7 f' h+ F) F+ s% O: d4 U& vA look at credit markets6 O: P" [+ [# D |) u6 f) v! V
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: h0 K: J3 t6 V- g7 B% k1 P
September. Non-financial investment grade is the new safe haven.7 M6 z7 Y' z, }* v
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- A. _9 l1 Z T. h7 \- A7 ?4 K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! X K! j, R9 q& X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 Q0 ~! `6 v- r9 Jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# ^# r+ d# B& ~3 r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 l( j- @& z" Npositive for the year-do-date, including high yield.
$ [6 `+ t) L; _, z' ~# {" y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, E" c* j6 j, ?. |! s- u
finding financing.9 L. H; C# E- |1 y/ M1 l# P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they: z' \! L$ z6 m: M; u
were subsequently repriced and placed. In the fall, there will be more deals.
4 K" {* |* a: g- n+ F Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( _& R& q" R, T3 [5 C* N' \; ^3 ?is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" m1 J O" W7 z0 g) Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for! C) s+ l/ X# V" r3 k. z( X' o
bankruptcy, they already have debt financing in place.
8 I2 H1 w9 f, W0 @. A. W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 Z* q+ H& |+ Y& g: ftoday.
/ Y- P: k8 H; H0 f! Y, S Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( F( D* R+ ` c# M+ T3 Xemerging markets have no problem with funding. |
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