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发表于 2011-9-17 13:16
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Current situation
8 j2 T9 ?, d( y3 F6 t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 R0 ~/ n) A; t! ]: \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; O3 t3 D3 u( {& u
impose liquidation values.
! @0 c$ `$ {: g! z4 |; `& A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' M( F& r2 Q" Q$ F& r [1 } I8 IAugust, we said a credit shutdown was unlikely – we continue to hold that view." H+ c3 n6 U& H! e; r) r! k g4 y. a+ ]
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 Q/ J7 K% V% m0 v; n. J4 J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 l" `* @% {# w0 G7 }1 x, }* o
& n$ y" F B1 D% hA look at credit markets
9 a) O! |3 _5 {+ ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ @& {+ T* @. z+ p4 G* x1 A+ fSeptember. Non-financial investment grade is the new safe haven.
5 i5 ?! s3 V2 V3 U* B3 B High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 x( P( b% u$ w
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) Z! \6 v7 j# r2 v
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" C1 ?8 Q: h6 z, Paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 u7 U$ i+ M+ ~; T+ d8 LCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 l1 }; p; m1 I( e
positive for the year-do-date, including high yield.
' d& _( j3 |1 r. U9 r1 e" _8 U: K Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
6 U+ U- ^; ~1 y) l+ h) U, ofinding financing.; I8 q8 N7 v9 S; t. u( e# J- X6 i
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they7 a% F1 ]9 w! X7 e9 F0 O
were subsequently repriced and placed. In the fall, there will be more deals., [4 B+ _5 X' i) I2 X
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and) o6 N4 z s) g; P
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; _$ U4 ~5 _/ F
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 K0 r) Q0 {/ E: g) W- U2 W& abankruptcy, they already have debt financing in place.
& |! ~- Y0 L6 K" u2 Z European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 k# j. [ Q r: h( V) l
today.
* C' Q2 D- q/ Q+ q$ ?$ y. ^) W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
& o; R, ?+ h7 u8 J( K" xemerging markets have no problem with funding. |
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