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发表于 2011-9-17 13:16
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Current situation
7 L2 b2 T {# k3 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ o8 F$ P, z) P* A& {0 Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ T# r" l+ z/ z7 N) X4 dimpose liquidation values.
5 E1 N4 J" j- q' D7 g In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# H0 ~: q% P5 u7 Q
August, we said a credit shutdown was unlikely – we continue to hold that view.8 U2 M `- d7 W, X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; O+ U/ W2 D1 J1 H9 e" J4 dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 T0 v: G% L; @
% F3 w1 y: |; [" S+ h+ sA look at credit markets
9 F9 ` v3 \1 L Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 I/ n1 q) \( X9 k1 }: d% Q" Z
September. Non-financial investment grade is the new safe haven.2 z! t$ b% F1 m: h& |7 q w. R
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% D5 r [5 E) G c
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 S5 _/ A% h0 l/ L2 J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have Y, }1 R1 x) X; q$ V- I/ f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) ]. b; |0 p' Z! X. f7 Q
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are* {, O; p& S* Y9 L- }( I8 k$ g
positive for the year-do-date, including high yield.
! s5 H d' N( O Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# t# E/ x3 Y+ A8 B9 o8 C% J' H
finding financing.; X: z5 p* e. {- b
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( W0 k' H5 z F/ j
were subsequently repriced and placed. In the fall, there will be more deals.# B1 ?- Y/ q: {. z' y W& @0 h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 A4 D9 B, t R* O1 O. D# E/ Q* zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ p. X0 ^. ^) o8 P1 N* y) Jgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 B8 y) L5 w2 b
bankruptcy, they already have debt financing in place.
& J8 _$ @: S' I0 _2 i7 C, z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain$ q/ M6 Q; M5 h5 `/ W9 E% S6 ]) F
today.
; w3 ^1 [! |# F! T* s Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" r% C& p- u2 _1 wemerging markets have no problem with funding. |
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