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发表于 2011-9-17 13:16
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Current situation
+ I: Y# U8 U$ I& Q; D c The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
, F/ @0 M: x/ a% Q; Q, i, z4 Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 i8 h+ q6 ?* d; t5 O$ {
impose liquidation values.
, T1 t% A! p1 o4 e9 t% y. f In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 `" j* g/ Z' h! g# vAugust, we said a credit shutdown was unlikely – we continue to hold that view.( ~/ k% u9 U% x8 D# U5 n
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 ^: s p ]6 T: R6 l0 k' `scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
: e' i9 I9 @/ i! e% o. L9 s5 O$ W& q" H. B: h7 S4 }1 J/ T3 f
A look at credit markets: x' ]2 \9 ^4 M+ ^/ K
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 N1 r Y/ l8 W. i% O. |
September. Non-financial investment grade is the new safe haven.
; F6 ?( n# U) k$ i1 h# e+ A4 `% v High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! S4 L2 @& l" A* ^! b8 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 Q4 N* x Z* v5 e2 n8 g8 I* ]7 wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 V. ]8 O+ o( [3 X" t7 J* I8 \. V
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 U8 Z6 K9 j( r7 d) pCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 p& v$ Y2 s( s& c* A9 Bpositive for the year-do-date, including high yield.* j0 T( {+ D, Z) w1 E( V+ D
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ O5 _+ _+ h4 X4 d/ c* j+ Z2 efinding financing.
' U% y, X$ p, F" u2 i* c Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' ^! X" G. g0 B' I
were subsequently repriced and placed. In the fall, there will be more deals.
! ^$ l* ]+ ~' U& G Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
6 r' [ t$ C# Z, ~9 f7 Q" ^is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were0 k2 \ W: ~2 X/ E
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- @1 k4 T6 Y; ?/ Obankruptcy, they already have debt financing in place. I) _: Q5 W& E2 k6 H7 i( X
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ V% s; U$ d& @) z1 j* E" Ttoday.
7 u' I2 Q" D% U F/ \ Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% d+ F) M- t( r+ F5 C
emerging markets have no problem with funding. |
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