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发表于 2011-9-17 13:16
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Current situation
# y1 P" b" F3 ^ o: l% e The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; T# y" f* l7 \3 h8 {" {6 ?5 O9 H( Mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; ]7 [4 r" E: |: h+ k% d
impose liquidation values.9 P/ \1 Y ^" H: C4 z9 L+ `: r w
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# O& Z. D) O" P" oAugust, we said a credit shutdown was unlikely – we continue to hold that view.
0 `, L) Q! Y3 u+ o* Q* x6 S The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
% J: N r( d6 T% }. _) z; Qscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 E0 E/ i- T0 }* _# m a/ G! L
% {6 E" Z; h1 s3 U6 gA look at credit markets
; i( n/ t+ W$ E9 z p Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
+ b: B2 R. a4 t3 O$ bSeptember. Non-financial investment grade is the new safe haven.5 W5 c' h5 O& {* x# v4 o% ?5 `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%" g+ p9 W" [3 J: y$ y; |' {4 _
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1+ C( z/ j' v; i- K8 G1 y- K9 o
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" B& ~- t$ F1 _2 z, U6 F# Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' N5 e2 F. z* V; P/ p+ r' |8 E! [CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" d9 q0 q$ z6 J7 Ipositive for the year-do-date, including high yield.
9 S7 Q U- V9 y1 u+ E1 M" i: t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% U& x/ \9 }% T [' u; Afinding financing.
* g) s0 t' E/ V9 I/ g& X+ U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 L/ v) B5 r' q/ n" awere subsequently repriced and placed. In the fall, there will be more deals.0 D2 e7 D9 w* W, T
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: f8 m q# U+ ^3 } ], G4 ?' ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ ]4 M' T0 Q1 k/ C9 m
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; v0 V' w8 \( L6 q" ^& H) ?: X. }
bankruptcy, they already have debt financing in place.
6 U b; n, z- \2 b @5 B4 T e9 x European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain; W: X: S3 g( J& O' w# k
today.' M) g9 y: k) v0 x+ q6 L( n* K
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
: w& R# n: K! R b) ~' O* Eemerging markets have no problem with funding. |
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