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发表于 2011-9-17 13:16
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Current situation [& d% b! k+ Z* Y! N! e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% o; i( O& r/ L: l9 Y6 R
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may- Y2 Q; s" B* x% X" r& B$ }. w: T# Q
impose liquidation values.
! C7 g Q6 _* A( B5 O4 F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
\& T. } c& D2 jAugust, we said a credit shutdown was unlikely – we continue to hold that view.
( A ]$ v( o+ R5 f The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
, q& y! ]3 U" j( f/ T; vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.$ j h8 t; [* [6 t5 l1 Y
& {; F3 ?) Z0 | F8 ~5 v
A look at credit markets# q1 x' y5 _9 R4 m9 p) a8 _8 z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: e+ |/ ?+ ^5 I+ p; }0 u/ ~6 zSeptember. Non-financial investment grade is the new safe haven.! U3 Q' B, ?2 T; R+ _4 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! }7 o$ v8 e( D4 e4 f+ Ythen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! a8 I- P7 ?6 D" L2 O/ j7 \9 v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ g+ i* Y) E; _9 w) @! Z9 t: saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ ]' l, O4 ^6 W2 o2 }) nCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" L$ I6 J) ?5 k& y3 h2 jpositive for the year-do-date, including high yield.
: n5 s$ V: s5 H: {9 s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 j+ D: `3 }6 r4 Jfinding financing.
( H9 u$ R% X) ~ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% g7 v) z# x5 N/ n! hwere subsequently repriced and placed. In the fall, there will be more deals.2 P- p; [% E! b7 ]+ P
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% V$ i& Q$ O9 [3 U# \' f1 z% Z( j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% F( R7 x! }: N U0 K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 U( P2 L: L q6 H2 s! t% Ebankruptcy, they already have debt financing in place.) o7 v3 X; P! ?3 R& D$ I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, ~5 i. H0 l: b% F: n) I2 l
today.) Z- Y) b4 ~7 R+ s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) r( h; [' J, K
emerging markets have no problem with funding. |
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