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发表于 2011-9-17 13:16
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Current situation
0 X3 n0 y+ @6 e/ s# A* q2 p The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
7 r' a: i5 l: q9 T* Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; n$ o. \- ?' M$ P+ ~/ U3 N- Simpose liquidation values., m& i1 ^3 p: S" w3 _
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In j" ^' u$ ]* d2 D1 K
August, we said a credit shutdown was unlikely – we continue to hold that view.
$ t/ `, u% ~# ~; V: S# X% r2 L' s$ } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) ]4 |1 e+ o! s8 s# o, s y# Fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% M. c& P0 M% R1 y# V- }+ \1 ^* n
6 n1 A+ E! U4 E" a+ H' LA look at credit markets
* Y: a, ^! |+ W$ Y' e' N0 L* \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) h+ `2 `* F2 Z9 a! i+ y0 w
September. Non-financial investment grade is the new safe haven.
8 E3 L" L/ S3 n* g& _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: L( W* P" z* I: V2 I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. F( a9 c! B( w! P0 W: D3 Y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ C* [) {8 u- \& l; laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade3 E% g8 m; e2 |% ?% r8 _
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
; Y9 q' P% n3 C2 d1 ^9 Bpositive for the year-do-date, including high yield.- m9 J1 C! k& M- v6 N: L& ~ |& n' k
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; K) f" y2 Q' p \finding financing.2 h- U( X* a$ e8 l2 f
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; T0 e1 R6 y* nwere subsequently repriced and placed. In the fall, there will be more deals.
% ?3 b/ ^# F% p+ H# ~% R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- f' e' p8 B9 H+ Cis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 r% a4 p; Y# A+ G; a5 v
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 R: Z' [9 y O+ f
bankruptcy, they already have debt financing in place.( q8 a! n) @! V
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ |) Z2 n2 i- {3 A# s& t9 otoday.
) v7 X! Y1 Y2 _$ a6 G( q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 A) i" C: R# s) y' V
emerging markets have no problem with funding. |
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