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发表于 2011-9-17 13:16
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Current situation
m) Q' S$ Q; _6 L The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* t6 Y* ~' ?8 F' b$ R1 uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 A- @* Q! K+ b5 A1 G
impose liquidation values.
- g* g0 L" s2 ^ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( w5 H1 t) |$ h+ ?8 Z( j6 q! V
August, we said a credit shutdown was unlikely – we continue to hold that view.5 @& i: d( d' Y4 d7 F
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
2 i7 H0 c/ R' Y/ |- Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; [5 |$ i; @" j" w) m2 g8 U
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A look at credit markets4 E3 J0 s* j- t$ A) d
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# D( B( A. h# X5 k5 r0 NSeptember. Non-financial investment grade is the new safe haven.
( H; }$ N2 s* s5 {8 e+ L High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& u1 j! @+ p; W6 [) K' Gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ x. q1 ^" E+ K; D$ _# D5 [' @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( h8 [7 O* t- d; T/ z- Faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade, X' X3 n) I' V4 Q; x5 X6 q* T" m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! G: r$ U7 e- V* R5 q! R+ Y9 z9 Xpositive for the year-do-date, including high yield.
! N. y+ t- K8 x- m0 @+ _ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble) b: i( s* ], r- D
finding financing.
4 A, J) t( |% g/ c& d* T2 l* ^4 V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& s+ R* N! R+ xwere subsequently repriced and placed. In the fall, there will be more deals.
1 `/ ]2 b" k! t Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
( Z- D0 D6 V" F* k$ N2 Z' yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' R/ S; o1 A% N% ~going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, [* B6 `& c& g. d- [! W6 r
bankruptcy, they already have debt financing in place.
: b" r7 b( _5 @0 T$ L European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ P7 u- z, x( z7 jtoday.
% B& Y( Q9 V: a4 o. j Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: P, a8 Q8 Q) v9 ^
emerging markets have no problem with funding. |
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