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发表于 2011-9-17 13:16
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Current situation
' z* [. C$ p! @5 ^' |7 Q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
8 a; t! w3 {/ V2 k/ p8 j4 Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may, m; \2 u# ^5 }8 ~
impose liquidation values.
# ?5 D4 r! s& I# O' h0 L In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 q+ ~4 a5 `& c l
August, we said a credit shutdown was unlikely – we continue to hold that view.8 o8 J, k" L0 r$ k' ]
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 P+ N' k0 Z4 c' M$ U+ `2 \7 fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- ~) l% Z& C/ FA look at credit markets) G0 `& c8 q7 V6 R) J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 x/ t! c- D5 jSeptember. Non-financial investment grade is the new safe haven.
a) A1 O" J3 S0 }" H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 i4 p0 N" K7 z! I5 N
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 n6 x7 J% I: w- P- Jbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- @ {. l- p+ T9 a7 ]access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. q' F5 C; q4 A) T' V R% pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( ]2 v0 y: O5 v3 l# N: H1 g0 }6 P
positive for the year-do-date, including high yield.
+ U: f' G7 i c+ o) {* v5 L' h Mortgages – There is no funding for new construction, but existing quality properties are having no trouble1 I3 @& q! X* T6 |
finding financing.
/ | o# m3 i' z5 N. R Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
( g2 u1 B: u: F& Dwere subsequently repriced and placed. In the fall, there will be more deals.
" t% ^9 F) W3 `- P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- Y! {8 I/ B# ~+ T% d0 z, @& Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# P, B' Y! ~5 Q# [6 |going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 Q8 a: I- x, `1 B8 c, ]1 p$ m
bankruptcy, they already have debt financing in place.! R- U' s: y, D J7 k) P; S0 A: k! N
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: u) D }4 t6 r( R2 Ltoday.
! S! o* n: L7 ^8 F6 U4 D2 l2 I Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# Z0 Z6 B3 U0 v) p6 R3 V
emerging markets have no problem with funding. |
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