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发表于 2011-9-17 13:16
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Current situation
+ v+ s+ @* f5 K2 V The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ e$ I8 m1 U3 h- {! V( V! f" |2 N
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) ~0 W3 {* [& R5 j- ^impose liquidation values.# y- j) t! T1 q5 \0 H
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; U8 n% W% s/ n- U5 TAugust, we said a credit shutdown was unlikely – we continue to hold that view., e+ a1 _1 U+ P$ \0 `
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 U: }6 ^8 ?/ {, F& [6 M% F" e: U
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- Y1 W$ S: L5 ~( P' Y# m
l0 D2 ~/ t6 Q3 i' {A look at credit markets# Z" i7 @9 p, O9 U# n; A) b
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in/ |! C8 @1 t; l) P9 D, E
September. Non-financial investment grade is the new safe haven.
3 B% W# m4 e& v* q$ k [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) S5 C! a8 D! O, {+ Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 [* E7 {7 l. U# Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( R/ M' Q, @7 xaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 f( d+ y% c4 }CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are2 H3 {2 e. Z- i/ e$ j
positive for the year-do-date, including high yield.: S4 ]7 K* a' h4 a, K4 L0 N5 s
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 H/ e+ L0 R) R: a
finding financing." R* ~! }" p; ~4 U; {0 D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 N! H% x* U: H: Vwere subsequently repriced and placed. In the fall, there will be more deals.5 w3 m/ u9 z6 ]
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 W" {+ n( a! A; F$ k" Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 o' Z& {6 o. k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 x* B. F2 v) S1 H! v$ O; R
bankruptcy, they already have debt financing in place.
: N; M, l1 I' f European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 p) u5 k9 q( d7 Y( k/ _today.
4 y( p! A' v' j* m* X* |3 R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" P7 b6 D0 K% W4 X: nemerging markets have no problem with funding. |
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