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发表于 2011-9-17 13:16
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Current situation
- T; H/ H+ p( v7 q+ x: Y m8 V8 R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# u$ D! ^, U: ^. D2 fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: F# @& A7 b7 m" R
impose liquidation values.+ v- o# ~* s: @5 l6 @; W* s0 c# Q
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, i( H$ G. K& @9 k& I) Y) \
August, we said a credit shutdown was unlikely – we continue to hold that view.
% B; a* B1 n9 v" i' K2 J1 }# a The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 a, g' r; {7 e: L6 W0 x" a Oscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
]0 M( b1 G3 M0 h2 s9 F
' O% \3 C+ @# r$ u1 eA look at credit markets
0 E& B- o7 \5 A' d* @0 Q* W$ \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ y1 F1 e' J& v" {5 T) ESeptember. Non-financial investment grade is the new safe haven.8 V0 ^" ]: Y# }
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* ^6 r) b% i1 _+ ?. Q6 g: V& rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 j5 P9 T9 Q( e+ h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ [: I$ j3 E! E1 {& C7 f* e
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 I$ x$ {) e4 U4 k
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& b, `6 e. ~0 r n; e+ ]5 [positive for the year-do-date, including high yield.% E8 d: @; ~! ~, l- x
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' F F+ x5 i U$ Gfinding financing.% t7 X; p: S/ U% [' ?/ @% z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
[: Z* I2 J* @6 I* _1 [0 N7 T- ]$ Nwere subsequently repriced and placed. In the fall, there will be more deals.
2 D$ y9 K1 g+ e. ?+ u) g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 g5 A' K# p5 Y! i
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 R; W9 V/ o5 Vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 W9 {8 c% z. S$ {7 W8 S9 D! N2 pbankruptcy, they already have debt financing in place.
, ^, L0 ^. r8 d! D( U l6 J European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! g, ?" l$ v" V L" ptoday.
8 L. O, G' s% R( n( W& ~" C# [% L Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in7 ?: W6 j: q+ S' z! G
emerging markets have no problem with funding. |
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