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发表于 2011-9-17 13:16
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Current situation
7 F% V& p: _& o6 ^8 Y. @9 F$ @$ v% | The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ t3 d" V# Q) V; T6 A) [$ ], Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# {# e! F4 H1 w5 z5 O: r- p
impose liquidation values.' k K p" Q2 O( V4 B/ y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- ~7 s) C6 i" F0 WAugust, we said a credit shutdown was unlikely – we continue to hold that view. R/ }. E( m. d$ N5 d# W |
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 }. J5 B1 O$ e5 e: Z& N6 s) U* rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- h( g" D6 F6 Z% J' F1 }A look at credit markets [) ]* L# Q. O- `8 n
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 g d7 e( A3 f8 cSeptember. Non-financial investment grade is the new safe haven.
0 g8 S1 ?$ U# \$ U' y1 A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 U: n+ L2 l( H2 x0 [( o) a6 ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 C4 A8 N. u! ]2 T. r% u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 Z6 Z" z1 y5 K% m2 Saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 k+ p. V/ q$ d" u( u, w/ ^- @CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# {! h( }+ \- L- Zpositive for the year-do-date, including high yield.
; ?$ a& i+ [' u# R7 U2 |. T Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ H0 k1 ~/ \1 e% A( D$ Z
finding financing.$ w4 y6 V$ o/ G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ P% p. v1 `# hwere subsequently repriced and placed. In the fall, there will be more deals.& Y% @( _- p' e* S9 N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 g& X: w- [5 q, i7 a( w) Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! {$ c: J; V; o/ zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
& [( Q- v* ?* V5 }4 j& }bankruptcy, they already have debt financing in place.
6 e. y' k, t/ p4 ~# e# M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
- X; v" J& i1 k9 w; Y2 P* q' ttoday.( j H5 ~! i* f- j; @5 o. R6 E% _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. a9 b3 I" K* @( temerging markets have no problem with funding. |
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