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发表于 2011-9-17 13:16
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Current situation
; a5 t* n. w9 g4 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
M" O5 s9 A' o9 f, A# d# Z9 s& kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ N0 Z& v C8 v) u# Zimpose liquidation values.9 y" C0 X: {$ d5 j- J' B, S& T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
& U' Z0 i6 i2 n) }5 x( zAugust, we said a credit shutdown was unlikely – we continue to hold that view.& }9 g1 ^6 ~6 ?- Y4 N7 c6 J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 [7 C: P( E. j$ @
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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4 }: b3 j+ V! e5 h; ^A look at credit markets
8 c' v) d5 S* l4 V: M; G9 ^4 Z: W Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 r- T. I$ W$ _7 k1 N9 Y# z+ { dSeptember. Non-financial investment grade is the new safe haven.2 O# o( P4 ~9 u5 ]3 [- B% j
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) J3 D, I- ?0 Q1 C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 `$ D- X: x) t; ]1 |! X8 A- A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# ?7 K5 ?4 f% S& H1 K/ ^7 laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' S+ r1 V( K v9 @2 w1 T& BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 B& n c$ R8 `( D( Gpositive for the year-do-date, including high yield." W8 k' D4 e4 K f, T
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( c# \5 k( w; E7 M
finding financing.1 `& ^2 f ^. h$ A3 C$ h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 H7 |' h! Y7 ?6 M+ \were subsequently repriced and placed. In the fall, there will be more deals.
+ R) F+ m/ U6 T. Y0 y. U/ v/ _4 [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 w7 S! f+ M% I) {+ Yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were4 ?& ^+ v+ u7 T6 x% V
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 i2 m; B2 B: ~" T+ w
bankruptcy, they already have debt financing in place.% T* d8 M* x9 Z2 H/ A+ L
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! C3 P% r. y, v$ c; x3 f }+ ]today.
. N6 ~# o* R7 U2 w$ M3 o, c8 h4 h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in; \" p* o. Z" d4 B/ e* l2 ?
emerging markets have no problem with funding. |
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