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发表于 2011-9-17 13:16
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Current situation1 e0 V5 J' {3 ~& @" T: ]4 q
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 {9 N+ }' y/ f2 i
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may+ Q9 a6 o8 R- X& F8 j5 Q7 T
impose liquidation values.
2 B) h7 c: M7 U$ q4 X1 T8 Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ T& `) D+ ?$ c5 v% p/ xAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* [6 ]! @; r4 n" [ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 ^, m( b5 `/ L- }3 b# C1 z0 jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 Y1 X4 R5 [& m- Q3 h. G: ?# z
5 c& `+ _$ ]/ u- Z5 \4 D6 e
A look at credit markets
% u5 H; H3 ~7 \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 T* `, H' D/ S0 C" ^September. Non-financial investment grade is the new safe haven. T; {4 ~. W! _& c# E) F2 j" c# ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" @5 z( i* u8 uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* x6 j) r3 G( O3 ~6 Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" x) V6 l0 s, _access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
! V* \# d- E. ?) P+ wCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) f" s+ `& U. i, I1 H0 |
positive for the year-do-date, including high yield.
) h9 y! p: [' y. B8 D _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: K! r' C2 i* D0 C# O
finding financing.
- F$ e4 Y+ p) [; h+ \- _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ @5 @2 ^) y0 H/ T& g' Mwere subsequently repriced and placed. In the fall, there will be more deals.
- N5 F. N, C4 g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. x: Q/ Z1 t, t9 eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
" ?: T3 W6 p `" Lgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 ^5 u) F) q) J) ?
bankruptcy, they already have debt financing in place." A& p9 R! H: w. S; \0 t* H" t: a
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) ]' l. S+ K, m' w n- C
today.) y& P* B) X/ u; p. Q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 M* { Z4 T4 J8 v5 p
emerging markets have no problem with funding. |
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