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发表于 2011-9-17 13:16
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Current situation
9 h0 Z0 W" @5 N8 R5 X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) h' o! s5 [- p0 t6 o
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# O6 `% h7 p1 J' I, d6 C% |5 Kimpose liquidation values. ~, ~7 O& X2 R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( O: f5 ^: x9 QAugust, we said a credit shutdown was unlikely – we continue to hold that view.5 V1 Q( o' _7 T0 h# ?9 s; v+ ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ f: `- l+ \, g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. R- q8 H$ r! S( f
$ O, O0 z ?, C. [9 e" i8 dA look at credit markets
9 F/ M; G2 A! {$ Q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 o* ?; |" l& v. lSeptember. Non-financial investment grade is the new safe haven.
4 a% N! C+ h6 ?& s/ F: O. \, A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%8 ~+ O8 Y. Q2 |/ p( T$ o4 X$ o3 k
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( K. S9 J! B2 Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* F7 b: g j) Q+ m
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ w. _. z6 i' ?8 |& r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' b, |/ ?7 g5 X/ D9 }% D; Spositive for the year-do-date, including high yield.
: F1 w3 ^4 d+ ] Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 v" q. V" W% N1 w' }* g5 h" k
finding financing. C1 ~$ B& s; i4 m: Y, B
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( C) y; _4 Y9 k6 h8 @4 ^( @were subsequently repriced and placed. In the fall, there will be more deals.
6 z. I, {' p9 D# h0 l5 R+ l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; a2 ]: x3 V1 Y3 R" k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 t/ X% {3 T, y% Z _' [9 `( Cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! V9 |% h) K6 e- `bankruptcy, they already have debt financing in place.; B- Z' }1 ]* p6 a9 Y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( d% d, h W( h: H3 gtoday. \2 w0 \6 k- [# C
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- C; H7 m9 ?8 i
emerging markets have no problem with funding. |
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