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发表于 2011-9-17 13:16
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Current situation
5 F5 X5 ^6 Z. W, e/ V- r% f The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; l# o1 |1 e% j# B' n, tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may! f0 i' s0 a6 y" t0 f
impose liquidation values.- R0 H4 E I9 w( w9 x* L: ^) v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( v1 } V5 \6 \; @ }* bAugust, we said a credit shutdown was unlikely – we continue to hold that view.: P+ ~9 |8 c/ B, [ P* k4 A0 Z0 R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 ~# c! e; @9 `9 _1 u% P: c6 p- gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! r; A8 j6 V Z8 A- h1 A( D; m
1 Q2 D# O+ N$ ^; s/ o# JA look at credit markets
, i; T; M f3 W( j, F+ E, I; N9 q& C Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 z1 Q( c' I, Y$ S/ d' t1 x
September. Non-financial investment grade is the new safe haven.% F( C' `. `' z) E, H
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ C* x8 k( K4 R1 N3 s& t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& U6 U7 q: S. @. c) Mbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 j5 Y) N) }- ] g. ~8 Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade9 j. l9 T3 I2 _/ s8 n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! s" |. y8 S% j0 k; N) |$ w( i mpositive for the year-do-date, including high yield.7 ^# g/ Z& Z- t! w: `, s7 _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ O) P9 }* E; t6 b3 B: J. Gfinding financing.
" }$ R) ^( h8 G. V; j& \6 ]# ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they3 }+ \: j1 f, `8 m
were subsequently repriced and placed. In the fall, there will be more deals.5 {1 N, P$ }2 u7 @* J7 \+ a2 z8 |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and: {0 l4 X5 y/ T( l3 \+ }
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% V5 o, W# s; f' @) Q6 D8 T4 I0 `* J
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) v2 i) z1 e! W3 ?( V# cbankruptcy, they already have debt financing in place.
' @( ^( W9 l: j+ R8 M( n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( t# y. b# @0 |6 `6 ~9 n0 dtoday.
, Z$ A0 o; j; f4 H4 A# H9 @ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 k; n& q7 b1 J2 r9 P
emerging markets have no problem with funding. |
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