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发表于 2011-9-17 13:16
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Current situation
1 n$ Q' a8 u. P+ f# S; j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; l0 z% {( {' [. `$ T% a, B/ _3 \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: n7 O& }& I2 B; {7 o9 @4 m' Y. q: J
impose liquidation values.! T* J5 i$ H( F. \, a% i8 Q% j; A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
y6 i$ m0 Q u" t- y. pAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 B, ?% u, d2 H' a3 x8 G
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 j. v0 N q0 |, Nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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: w# g5 I( ~0 x0 {7 WA look at credit markets
t5 r4 G& B+ H Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
3 M0 C: K9 a) g5 G6 TSeptember. Non-financial investment grade is the new safe haven.
* o, s+ R7 C6 o k5 P3 d T# P' Q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
6 B) L% \; M+ X- r7 t- m+ Ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& ~$ _: M$ H# g& L3 d6 b6 _1 pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 Q2 x: D, ~# k8 Q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
\# y0 T* O. }* aCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are% V: D9 b7 k: o& M6 ~4 L
positive for the year-do-date, including high yield.; D. I/ j. C6 c) B' E
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. J5 `* |& ^6 G6 w. `" B
finding financing. m; F$ J6 L! k, J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 {. p- `! j8 n) J' _# F0 ]7 J9 p
were subsequently repriced and placed. In the fall, there will be more deals.8 h2 M1 [& k6 x. o* _) K$ x
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 f0 q9 j* W1 v7 r$ X* g) B. s
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 b1 y4 h0 E: D& ?: Z. rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
8 e l, M/ M; {bankruptcy, they already have debt financing in place.
b7 J& Q, p, x5 j) _ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 M' Y1 I& t* R) O6 T1 U# T* Ftoday.: j7 x& t1 L5 i2 M/ q* F9 \
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
" A8 J% K a: D2 j2 F$ cemerging markets have no problem with funding. |
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