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发表于 2011-9-17 13:16
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Current situation
% x5 r. D" f U7 S. V$ d; X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( G; r' ~0 l: d$ G* \0 Aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may) ?$ J4 }7 @/ j/ v
impose liquidation values.
, E6 }2 W6 t! ?3 B" e; N( l; J. @ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ n" T5 B u# H7 @- t; {6 [August, we said a credit shutdown was unlikely – we continue to hold that view.' l' X: K3 q# {& ~$ J6 ~2 f7 I
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, \( k; \3 r' S
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
# r: Z' Y3 f3 n, }: R Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in% L9 H7 `6 d0 p: a% B2 G5 F
September. Non-financial investment grade is the new safe haven.! ]# ?( A q3 }! L1 M) I" {. e
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, b/ J8 b' B3 o9 W6 s
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 O; C0 ~. M+ P& u
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 w1 `) [6 J2 y2 Jaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 ~, m8 U& p/ q; V2 S0 ~
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 }! e( E; ?: Qpositive for the year-do-date, including high yield.
! G. d. L5 x8 {) D+ c6 E6 k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble: ?& }, S# k7 n1 x
finding financing., A: t/ k: q0 N% @6 p
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 e. k2 U+ h3 O' w
were subsequently repriced and placed. In the fall, there will be more deals./ R7 q( J+ p4 v2 H/ T7 [$ N
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 e+ j/ p0 b' T: t
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ W- A1 L- c0 \1 W. ~! |going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 q# T2 A- a5 S/ ?. L5 I3 Qbankruptcy, they already have debt financing in place.
" p4 ]! d4 k1 S- S6 J, A European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. o+ f6 e7 ^1 ~ R/ ?* e5 F, y- f
today.! V* g7 @0 I8 K; S Y
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* x% e+ w+ z0 e! c# r( T2 O
emerging markets have no problem with funding. |
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