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发表于 2011-9-17 13:16
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Current situation
, I9 Y3 K L; k# {1 \' v The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long, P, a M6 A9 g4 n/ u2 S& W1 ~9 V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
h' H5 @7 d6 b' N& Y* P5 V" Rimpose liquidation values.
- t% A. s8 \) B+ F0 C0 { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 i5 h% ?* m' v& e6 ^; T a/ _# C1 y
August, we said a credit shutdown was unlikely – we continue to hold that view.
. K# o) h+ Q0 f. d) G: g5 D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension7 y* j' v" |& n2 a8 J7 E k0 D
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- L6 {, N) G8 g9 \
1 p' h$ M1 G# M; ^) T eA look at credit markets$ |" i& T" c5 i, R" M
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in9 ^, }& P% |# A8 ~
September. Non-financial investment grade is the new safe haven.
& _ H5 u! c- Y) \$ d High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& s. d1 P% Q; ]1 F8 y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: q+ }( n) N6 l2 b, \) Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% M# b# K( e1 ~4 k1 E/ U8 w
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
d. |. d7 F4 gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# a$ j2 |4 A& Z- \positive for the year-do-date, including high yield.
+ C) X. V2 c1 F! ?( X3 ]/ N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* L4 p8 g, ?! t$ Efinding financing.2 g2 ~% P) i8 z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ Y. f( \6 \; d; o7 O: n5 x
were subsequently repriced and placed. In the fall, there will be more deals.0 U' \! y6 l; ~& b p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
8 h0 ^' Z3 Y) i- Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were- D5 b9 c+ D8 |, j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
0 [% ?: C1 Q; F# ], Lbankruptcy, they already have debt financing in place.) Z$ n/ p. [ G5 k7 ]4 D
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain8 e0 Y% p! }, Y7 r
today.
4 M6 O Y: D8 ^+ G Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in) ?& ^* E' U2 G" s8 Z
emerging markets have no problem with funding. |
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