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发表于 2011-9-17 13:16
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Current situation
' @1 x+ W9 r; P5 z+ b6 Q; H The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 S* Y! ], h5 H! M) B& \
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) F. c( f5 v% q6 T- l' c/ K limpose liquidation values.
3 Z- g! i8 N. @4 k8 W" H9 n In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In0 D5 K0 ]; g- e) L: l5 m. b3 D
August, we said a credit shutdown was unlikely – we continue to hold that view.
' l( t1 Z9 r7 `4 |7 [- {, d The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension {* t3 Q; W: @& P: f
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
5 m; R" `) {: {; Z5 \ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ m0 M6 D- R/ `* q n
September. Non-financial investment grade is the new safe haven.
5 |: q2 s9 B8 _, e3 R" a7 @ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! L+ a6 u, R9 p& xthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; s9 J) v+ r& [( ~8 }billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* T( Q& s! e. Y9 c) l* ^3 [1 \
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% K' c. g6 g) J3 O2 k' t5 t' Q# }
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 `0 r+ i( k5 r) G# q; ~# h0 B
positive for the year-do-date, including high yield./ j2 J9 L: J' Q5 a3 ?8 Q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! @4 u! W+ B `8 Y) s1 tfinding financing.
, c$ Q' G9 Z4 X7 w Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they) y7 _6 z2 O8 d% W
were subsequently repriced and placed. In the fall, there will be more deals.
4 h& o$ y/ n6 h U Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; H7 I6 [* h0 m4 Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( d! I N8 q! H1 w
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 S0 N. t' ^# l) L0 d, Qbankruptcy, they already have debt financing in place.2 H3 N0 ^4 m6 V7 M! _# o$ z
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- l0 Z' O) s# q$ A( j9 x: R
today.# O" M2 y6 @6 J$ m) `* f
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 L. }; U i6 ^+ w4 `
emerging markets have no problem with funding. |
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