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发表于 2011-9-17 13:16
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Current situation
" j7 O7 V- J- _! A' [& s The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 R! A, K% m, L/ x+ }5 ]2 S! r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" A$ |8 r1 \2 n% V( nimpose liquidation values.
1 m P9 h7 t; j In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
4 X* b. ?4 x U* [August, we said a credit shutdown was unlikely – we continue to hold that view.! a" @( C7 x! y: Y6 e+ Y3 [6 I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. j* i: Q, ~7 U) }/ hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets." g! J+ T" \4 q2 a! i3 a) B- z9 {
, x' z0 R% \" e; C8 pA look at credit markets8 D8 V0 Q: \) z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in' Y3 `5 s( y* n0 T1 i4 {% i. n# v% |
September. Non-financial investment grade is the new safe haven.
$ r7 a( F4 }: p3 R4 k High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%( |; V3 T" }4 z6 T3 X6 p- J3 k* T9 ~
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
8 ?$ r6 _. l" \8 G8 Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have, N+ w! z/ G: d# ^
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 ^. U1 e( J$ t& Z1 A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* @: H' t* F0 u& k' h# |$ \positive for the year-do-date, including high yield.
; N' w' z, Q+ `1 x) Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 Y+ T1 Y+ h' h& q' Z5 e' o
finding financing.1 Q4 S6 }$ F) I* d+ Z3 T1 G
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 |( a( l6 {3 {" j& @ L6 h
were subsequently repriced and placed. In the fall, there will be more deals.
) A4 }' O3 T$ T# e) {6 [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* C2 k9 r' r, r( f, Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 j, C: _3 v9 f0 w# n; C p0 W/ a
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- L7 [4 K5 A4 `4 L* cbankruptcy, they already have debt financing in place.
8 ]) K k' }+ q5 i European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 N! l4 R' A: i Stoday.9 J* c% V, _# R3 h# h1 u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! A, S) s# N+ e1 K* ]" }emerging markets have no problem with funding. |
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