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发表于 2011-9-17 13:16
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Current situation
5 a2 \ y; N6 d& E" p0 q8 l+ ?9 M The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& [2 b! ~& a! c) A6 ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ N( }) ]7 V' p" C4 f( R) i- eimpose liquidation values.
0 J8 c* m- z' W! g, ?. A6 ~ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In+ E; }' l- x% p
August, we said a credit shutdown was unlikely – we continue to hold that view.* N! @9 L) H* f& X( }: _/ [
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 x- _5 U* V6 B r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.& H# J) k" C2 }* v" j) p
3 B4 {3 `3 b0 [, e2 q1 ]# o0 ^* oA look at credit markets
( f( |3 w6 [8 l2 V Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 ^, S# M! b- T8 m5 tSeptember. Non-financial investment grade is the new safe haven.
: r! E9 f2 L& D* ?$ N4 i High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" U. F" g- K+ [% r3 F5 B1 Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% a$ Q3 b! G& N- c7 H( j6 ]* e" dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
}7 ~" H( T5 Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade6 G9 H& _7 r3 c4 `% `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 \& Y8 u/ I9 `: T0 `positive for the year-do-date, including high yield.3 W$ r; i$ q$ n) o& i
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 G; I3 n, j bfinding financing.7 b- W- D3 Y/ B( p0 P
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
" w7 c9 f& r! |/ p+ `- h, O/ dwere subsequently repriced and placed. In the fall, there will be more deals.
8 d& z6 ]% w% C2 ? Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" n, F. I! K- ?7 t. ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 _; {3 }& |8 t9 U- Mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 ^) X( R, N. P( y
bankruptcy, they already have debt financing in place.! A& _2 _: H. V5 U
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain% w) ]6 ~8 c6 f5 k9 I9 Q
today.
- q& @1 q) Q) U. g5 ~# Q! r3 } Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 G N0 z( Z0 K# g" wemerging markets have no problem with funding. |
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