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发表于 2011-9-17 13:16
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Current situation
x9 X6 v. B2 N' [" H7 ?* T& G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
% p& c9 z, s: q* X& c2 T; Jas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' Q' W# r0 g' M, C# Aimpose liquidation values.
+ a6 D2 O! ^$ O- }& S3 a& J- B% ?5 A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! `, o; W) V1 e( U$ F% IAugust, we said a credit shutdown was unlikely – we continue to hold that view.
' n7 U* M$ G6 {$ p8 Z* t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- f' S7 L0 v4 B `0 \scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 y* H0 D- |: wA look at credit markets
+ X. t$ X1 L+ c# F, i, L$ b, V. t9 \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
& X1 }+ T* e; y# ]September. Non-financial investment grade is the new safe haven.
2 K7 f7 w" c* y/ o9 \; b High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% {7 F, M8 u |8 ^! [6 e$ [7 {
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ F3 t* p- P6 _1 O1 z" n0 p5 r3 h. e
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ [* b, ~8 j! Z0 Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 J# ^3 X% H/ C7 T: m+ E6 }
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 d+ M3 F3 U% F' J- h. Rpositive for the year-do-date, including high yield.: J& ?! A; q$ _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; q; \/ R) ?3 l( B+ n9 H% P* R
finding financing.
H6 a; C# ]( b3 x% r* V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 @. ]4 |* ]' k1 w7 H# v: rwere subsequently repriced and placed. In the fall, there will be more deals.# C0 l+ M' S. U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' s* Q: L2 @1 J5 `9 U% x% ~& w
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
i. ~2 t; `5 ~2 U8 t/ |2 bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 D( e) D0 ~" l# n7 Y2 f: D6 E
bankruptcy, they already have debt financing in place.( x7 t% @% |1 S% P+ X, a
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; h) T" j) ?( ~0 e% {' G$ \# A
today.
8 y! Y; a! c# v! T% r Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
Q+ g9 [8 _# q, bemerging markets have no problem with funding. |
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