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发表于 2011-9-17 13:16
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Current situation
( L5 M$ q4 K! s7 L' I' p$ j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ q/ t. A" t) das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may B2 C! j9 e; l# Y' r/ h
impose liquidation values.
. a) M+ n- n6 I4 O2 _8 h4 p In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 X# e8 S2 N4 T$ m
August, we said a credit shutdown was unlikely – we continue to hold that view.
( k( c+ A `! k) v8 N! J* R& f% E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension, B4 f! D( _4 t' Q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 o5 I+ E! t! E; d! l; P$ x
O! ^* [4 P S# e MA look at credit markets- Y# Y$ n e) G" e0 Z- e: @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. E5 w5 l" H6 M" K/ b |6 RSeptember. Non-financial investment grade is the new safe haven.2 O8 V$ X6 h. y, I9 T3 c: c0 y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%- C' R* |$ D* _ l3 u( a( B) p; z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1$ f9 j! K2 p+ a8 r; Y0 N% q( A
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& o! {$ V, X4 }0 }0 i# N% Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
: j( J" I. ]! o# g4 JCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* u! x3 {# _- ?$ a9 z5 I" | H: f3 t5 Opositive for the year-do-date, including high yield.
7 d3 p2 o* j3 k: P& r4 t1 \; F% x Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 Z2 ]) W8 V9 |; S/ z( N$ ?finding financing.. ]9 Z% G. Y/ c7 X( B C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# s: N4 T0 \4 u
were subsequently repriced and placed. In the fall, there will be more deals.
+ L; |) G; }' b Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 K7 {! ?' A( P. s V
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ B4 ~ J$ n3 m( f: G1 w! c9 K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, r8 ]3 R" }9 q# u1 X8 {
bankruptcy, they already have debt financing in place.) a* G8 ?/ a3 M# V
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 Z8 e8 S7 l3 C/ m/ ?today.
2 c" q( i- [9 R8 ?3 H7 o8 ?9 D8 q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
( H6 h; s ]! u+ _* u5 Z gemerging markets have no problem with funding. |
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