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发表于 2011-9-17 13:16
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Current situation
7 t# e0 n$ o9 @5 n) L6 ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long' ~1 J& j5 ]: v: b1 |$ m3 z* w$ h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# w. M! t& t& i# e) limpose liquidation values.+ K) X6 D$ I$ e# p
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
/ X5 Z( w: Q% p( i6 v! f0 _0 oAugust, we said a credit shutdown was unlikely – we continue to hold that view." T. L% Q7 N# X( N6 ~" W* ` z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 K# S" h7 M+ q) m/ m; G Vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 M5 M f# K$ x$ M
# z' S& {! f( | y
A look at credit markets
4 J' E- P( A5 D8 c. Y. | Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ M4 _, n* q' C3 d* `, h QSeptember. Non-financial investment grade is the new safe haven.
6 O# \# X# t N; } |4 q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# [; b, O/ r" Q3 _3 R
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
K% u% Y9 `$ Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have7 }' L1 s* E6 W* B1 _2 k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% x7 s5 }2 X" k0 S% t1 {+ H) JCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" D) J9 N& E- @positive for the year-do-date, including high yield.
$ z+ d& d+ p i Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( w3 q/ }, k% p+ ^. i$ Ufinding financing.8 c% M5 D; N2 Y+ ]
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; g8 j/ j) \& h. w2 i3 a6 @" w* ywere subsequently repriced and placed. In the fall, there will be more deals.
" d; @0 M2 I2 g2 V' E Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' d) q: z9 F' p; V1 X% B4 r/ Lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ [9 u" G1 j+ Tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 W& S+ }2 n1 V2 wbankruptcy, they already have debt financing in place.8 I% Y0 A v- G* N, \2 B
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, X4 [. h' l# E0 F t# f- G
today.8 Y9 d" g ~5 t I& t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( B3 l2 z) z q9 Y( p
emerging markets have no problem with funding. |
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