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发表于 2011-9-17 13:16
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Current situation5 ^3 X+ f. W( d4 E- h% O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( |9 X9 ~ K4 {: Z& T8 w# D& das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; y: F+ j4 F. Z+ p8 X' I
impose liquidation values.
( {" T8 A$ I' i8 U' \( L In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. a6 G/ @1 d' O* g4 q' GAugust, we said a credit shutdown was unlikely – we continue to hold that view.
+ c! E2 b: l) T: K9 ^1 o The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 D" g' `$ {0 a) D/ R& ~scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% h5 Q2 a, O I# C- s" u4 P
* z9 L* O! H$ N) J SA look at credit markets
# @- b" g- {9 @! Q' F& f9 W! z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in Z/ [: x; F, ~
September. Non-financial investment grade is the new safe haven.+ S2 k& e, `" Z0 I6 g
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%3 X& F/ R+ h0 m9 }6 V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 g/ d- T. Z1 j3 [& }4 x
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
* w5 X' i( W5 s- B% Vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' n9 M" {& ?6 A D+ [( o! q$ rCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# R' J. H- y" z# V1 t0 I: cpositive for the year-do-date, including high yield.* z4 @+ N- J/ L7 u% `7 v0 k( n- N' c
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' q8 E! X. d2 V1 efinding financing.& f9 ]* {1 G# V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 T! N8 `" f1 [were subsequently repriced and placed. In the fall, there will be more deals.# _, Z% x. z- Z6 h8 o; U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& M$ y! C: b( O+ A) @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were1 G6 I8 R3 I6 U$ K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; P9 s1 ?$ P$ x9 Hbankruptcy, they already have debt financing in place.
$ A$ ?" u* U1 l( Z1 H9 w European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- e) w$ }( o3 Q- U! z
today.
6 A0 M' m; l1 ^ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 _& A3 U/ C" O
emerging markets have no problem with funding. |
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