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发表于 2011-9-17 13:16
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Current situation
5 O9 ^$ I6 h" A# t The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 Y8 J, J! X/ Y8 y+ nas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may. |- {( J4 u2 r
impose liquidation values.
+ \" I+ J: H7 u; ?1 a6 h5 G( x F In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" a, ?; H0 ^3 l) U: C& CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
# Y. `. p/ W; m6 s* T# t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension5 s' u( m9 T# p5 g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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" w3 p9 X3 K0 k! q- t" Z( s; r. d4 mA look at credit markets9 U9 x! o# v" b3 T
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 }! H* N% C/ sSeptember. Non-financial investment grade is the new safe haven.
& m/ c2 ~* J) T! B( f# b High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
" D- G3 B9 F& Qthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 P% W, i! U& m* G, Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
+ _1 v: h R" g/ {access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 M0 j! o2 y* F" KCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 u1 w* F, l9 E& W: M9 Q3 K
positive for the year-do-date, including high yield.
+ C0 J8 g( n% ^. P# i# Z( c Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! E* x8 }$ {! _3 r/ Ifinding financing./ F; K1 S" c" X# K6 d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' Z* t, k: _! ?8 O% N) ?* t0 jwere subsequently repriced and placed. In the fall, there will be more deals." \$ V$ n& ^3 @) A, x7 f7 K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and$ c& O; o/ ~& Y0 N7 G& @; P3 t
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were" q' @7 {2 m: n _0 Q- }
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for7 Q9 Q: N& H1 [" G
bankruptcy, they already have debt financing in place.3 ^+ X: p @7 u- a# j8 {8 s1 O/ s
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! v# ~. A1 ~, w" \
today.) U5 ]8 O% P8 G! @! ~% a
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ N6 D6 S2 C% `6 U& Zemerging markets have no problem with funding. |
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