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发表于 2011-9-17 13:16
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Current situation
l. B% Y) I+ P) s The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* K( j" K* L5 o2 b
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 I1 t# i5 R" u7 `/ I$ e( Z
impose liquidation values.
k3 O+ O H/ x6 G In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 k) `, n2 l0 o1 y! n9 oAugust, we said a credit shutdown was unlikely – we continue to hold that view.
6 I }, q/ j3 G) I7 C The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
) C8 C) b; ^7 X6 s8 Pscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 w" V" d% k7 i1 I% AA look at credit markets2 g; j& \1 R5 l; n% z2 Q! ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( Q; a: u" E7 s2 |
September. Non-financial investment grade is the new safe haven.
; ~6 G$ S. j0 H9 a* E$ s. C% G" R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 i x: y( u) I" J' t9 K0 n) Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1- Z \2 }- R4 @" v% E6 J Z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 {; d6 X) J, Paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 q( I( F" {0 D7 G% f2 b: @
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 o" }' L0 f Z' {1 k+ Bpositive for the year-do-date, including high yield.
5 k9 j5 W. z" C; n9 y Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' a/ A+ @8 `" U* s( v- H5 gfinding financing. }5 ^) Y" d* B/ `" Q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
# Y* B+ ?- M* c; V/ c9 ywere subsequently repriced and placed. In the fall, there will be more deals.: |7 R/ [8 M, A. S3 o
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" B8 t+ @% L. C7 Q# g8 Jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 X4 P& Z7 D8 L2 B. @* Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) [$ Y. H1 M& h# S' qbankruptcy, they already have debt financing in place.. X0 M4 l. H a" g6 m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) |2 P8 K4 {5 I$ Q! B n
today.
1 }( ~/ e7 s$ x0 @; L Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- t0 P: W6 K ]# F5 J" \) {# {
emerging markets have no problem with funding. |
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