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发表于 2011-9-17 13:16
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Current situation
' b C$ U* Z) i4 R3 l The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" v, H% R' Q8 g4 |% Xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: Q7 B8 c3 y" K) P. n( Nimpose liquidation values.2 }* H$ N `: f6 a% Y, z2 e5 T
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 G; P5 j) F5 Y" Y
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 M/ P* Y+ a' W( E2 F6 t' y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 U! O, x( u4 n7 l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 {1 ]' ~) M& O" p# J
r o# |) ?) P9 G! Z
A look at credit markets9 d) @5 a- q, p# O* N; p* B
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, n: I \) C Q2 i f/ J$ f8 `September. Non-financial investment grade is the new safe haven.
* ~7 i e% h2 G+ U$ x# H4 W High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ J7 @' Z* f3 ~$ {+ o& b% Tthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $10 x( [/ g6 [, S4 d( y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! n8 N# V9 p. m0 Q' d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 V% A: m. |7 \+ n) B: B9 tCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ y$ C. |. W0 h
positive for the year-do-date, including high yield.2 \4 E' c* {5 |6 \7 e1 u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- k& r. @5 i! P3 c0 v# Q
finding financing.4 C' j) j3 C# m- N$ k( m7 C: `
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: K/ p8 b5 h B$ L) ]( x* nwere subsequently repriced and placed. In the fall, there will be more deals.7 c4 i' w$ w' i' x, J4 u; |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ C' ~8 g+ {5 _! A; dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& f! n4 F# k( y/ X$ b( n
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for1 E5 }! v; \5 [4 u/ @& l
bankruptcy, they already have debt financing in place.
! ? ~5 a4 m) [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# W2 L6 h% X$ D& K* Rtoday.
* r4 W7 h0 Z1 f2 [3 r6 ]: ] Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 ^6 ^& R% q4 C5 A
emerging markets have no problem with funding. |
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