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发表于 2011-9-17 13:16
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Current situation
* g2 A1 L4 e$ P+ k" f9 S The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ a7 W5 M' Z4 f5 I yas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may9 Q' C8 z/ O. X7 `" M2 c; J9 [6 z
impose liquidation values.: T* E" \9 E7 \7 c6 v& |7 w
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 w& m- B5 z+ m, G) C. NAugust, we said a credit shutdown was unlikely – we continue to hold that view.2 v9 t3 N# H7 D4 c" F, s/ z1 }! O
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 E+ F$ e4 l* N* \9 D( T! e4 l! r: l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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& y' I- K$ A( BA look at credit markets
5 c3 j. [' w e; J6 a, s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. [2 F1 Q/ \1 T8 U
September. Non-financial investment grade is the new safe haven.
/ N6 L9 N2 m2 V7 p) Y' E7 s9 N High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 b6 A) _ j" K- C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) ]' M4 [1 f l+ ]5 v3 ]billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% v7 L/ g1 H9 q d8 q* Taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ D7 Y8 F/ k b9 q2 ^& l3 m5 N2 {CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
' X/ @4 ~8 l4 ]# h8 h7 Z# z, `positive for the year-do-date, including high yield.6 C, ~/ e5 Y- x: I, D
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble" U6 I0 a# N, j7 s
finding financing.
, L" d/ Y9 G4 R) N$ l5 a- w Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they4 Z' v" e3 r e0 o6 X4 \( e0 X1 H
were subsequently repriced and placed. In the fall, there will be more deals.1 ]+ `& X( [) [' P& y6 T! U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 I- y: N% E; `5 |) }2 {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ d7 R5 n& J1 @& w$ D) r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% _ j9 m- S: B0 z1 R' a' K
bankruptcy, they already have debt financing in place.
1 ~8 R' \3 r6 }; j( K European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; \ \7 h$ b1 ^* u8 J: ~& G' g5 X" V4 [
today.4 f2 v5 ~; ?+ g( |3 [* q6 [
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ k" G/ F* P- @- L. xemerging markets have no problem with funding. |
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