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发表于 2011-9-17 13:16
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Current situation
- A" Z0 d+ ?: |3 \, C5 D* r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long( r+ H; x; _' l2 B0 ]" `* L
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 Z8 s5 ?* @$ E$ j
impose liquidation values.
" E- d) M" t$ P& {) {6 G v5 n! N In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 u* r* \. F+ M0 V4 w, ~August, we said a credit shutdown was unlikely – we continue to hold that view.2 u1 [# h: |0 k& z
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 L# N- c* J" p( H7 r% m& {! ]1 ascrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets5 G- c9 [8 d( c0 h t# c0 B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 i4 \& d; y+ s
September. Non-financial investment grade is the new safe haven.4 O) e: T6 p; S0 A& n8 K0 K3 l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 y$ z; h' U% P3 k' bthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 Z3 C) R* I* L. u! H9 ~0 b4 }" M
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# |( H, o* f$ Z, Taccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 o% }7 ?+ s ^, ECCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 m- j' E1 f7 |5 W3 G S
positive for the year-do-date, including high yield.) N- V+ }" \2 x- n- H
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
; B. S3 x% P2 V4 C S; ]finding financing.0 K j4 Z- m' o9 g) n+ U3 {# d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% ~) o) j9 {. e7 n6 [% X
were subsequently repriced and placed. In the fall, there will be more deals.- u, f4 m- v. ~( z$ e. t. H" H a
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 `; \4 [' W& g) _5 s( H7 X
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ _# `$ R/ y& N) f2 g, _7 \0 ?
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( i1 \/ I9 f7 I, g, ~7 L3 U
bankruptcy, they already have debt financing in place.
, M$ U$ ^! F! s2 D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" {. x+ h4 M" G# d6 i: D
today.2 g; z0 L! z# ^) [8 ^7 N
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in0 Q7 u: H6 T5 s' p# O( u
emerging markets have no problem with funding. |
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