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发表于 2011-9-17 13:16
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Current situation
1 b) B# } p/ B o. R. R' B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: D: ^; M ?; z2 @+ b) Eas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 K0 M7 O; R5 y/ rimpose liquidation values.1 W7 [6 e* h- q; p5 }; }$ `. Q( u O
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 h3 K' C3 v) EAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 g0 I) u e/ w6 j' u+ ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ [0 m* H/ h- C L1 g- y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.* {- J- r+ J. v% M
, K7 l% c3 E$ V6 F9 CA look at credit markets/ l) I7 P1 o6 B0 z! J, ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% G! w" d2 ~/ U5 t X# \& XSeptember. Non-financial investment grade is the new safe haven.( v, D" J; u4 H5 J i
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 A" }) N" m! e; w) qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 r5 q: l/ r' g
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have4 `9 R8 W+ A+ l0 ~% c$ t) ]
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, p5 U/ ?, d9 w- H( k
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ }4 t o P* t! _7 M2 A% f
positive for the year-do-date, including high yield.) @) V# R$ H# y A7 y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) M4 Q$ A: a: w0 W: T0 A+ B' @finding financing. i( T s3 E; }$ \0 i
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 i8 Q! ^$ Y8 u5 w5 P ^were subsequently repriced and placed. In the fall, there will be more deals.
$ e L( D5 w1 s( ]( ~0 ~( ^ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, S! ~, F5 D: ^2 J9 W& mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! D* Y* X( J/ l; h3 O5 T/ xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for4 N& C/ q l1 Y+ [% T' v, D. H8 Q
bankruptcy, they already have debt financing in place.( H( I1 C. [/ d1 @) D/ T
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 E/ I0 A4 K7 T" H
today." B; d8 g9 r2 R' u# g
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
. a8 y# K0 m% d" r: u; ]emerging markets have no problem with funding. |
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