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发表于 2011-9-17 13:16
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Current situation
1 t9 Y9 @: z8 z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& S0 m+ U# h% y9 |+ @& [as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may0 {( a3 B" C3 `6 q, J2 C
impose liquidation values.# R/ c- n& }% C) w5 v( Y6 c! U4 `
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
6 E& @8 ]8 T$ U2 I" ?, A$ _# [August, we said a credit shutdown was unlikely – we continue to hold that view.
3 I( D0 C0 Z$ v# B8 m The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, t. Y. Q0 f4 |& Zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 b+ e$ c% t6 K. S+ t8 I
4 N3 v: X8 z% N! K1 t1 I
A look at credit markets$ V, _* D' a; v# R
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 }" v" ]8 ^& O
September. Non-financial investment grade is the new safe haven.
8 H7 S! w1 }, r3 R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 i1 O- K" j- m( l* E1 ^* F
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 \* \2 A5 L+ V R& B; tbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 g; M! _: [ O8 s* E" K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ a9 n, }4 {) }* v$ `7 X$ J
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 z7 J; |1 N2 V' V4 W6 ~, d& V( wpositive for the year-do-date, including high yield.9 L7 ?0 r" w4 ~; O c, ^7 g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! ^% D; v) G& s, R
finding financing.7 a! e: L2 M5 x& B, f: y
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 V* B* U5 {- n: y
were subsequently repriced and placed. In the fall, there will be more deals.2 x8 K3 i" V. T
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 F. v: {3 _( h9 A* k9 Eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% |. |! I& {" Y& |5 w& ?going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 ?8 q" |3 T! k5 Z9 U8 mbankruptcy, they already have debt financing in place.
3 i Q0 V2 r8 [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
% G* L5 I( \% q6 ^8 xtoday./ N4 p3 y+ k" K
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" j- j% v, D0 Memerging markets have no problem with funding. |
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