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发表于 2011-9-17 13:16
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Current situation
3 O6 z3 f [% J' ^7 b The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
. c/ Z4 V! Z; t" Kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
& H1 F. l" f6 z' @- r0 V- w# Q' Zimpose liquidation values.
) f* }! e! o0 f/ p/ Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 C! v9 H K; z
August, we said a credit shutdown was unlikely – we continue to hold that view.8 ?. V7 \5 l. C& J! @; e: i$ |
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension/ r1 N% J6 d4 q8 k' {3 z
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 {$ D3 y$ s( J; x/ A8 \1 \
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A look at credit markets$ ]/ N; [! s( x5 ?: |( Y' U; D# ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) S. v$ Q+ R0 c. `* aSeptember. Non-financial investment grade is the new safe haven.
* D( B# b% G3 b3 V0 y4 u( d( b) Z3 w High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( f# i( L# ~, O' O. B9 `then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; {7 m- p: c2 h
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
- X' g% u- Y7 ?/ L& |8 N$ b9 _- Baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade0 _" H+ ~! q+ V: i. W g
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 C; ]2 C+ [+ p0 H7 x0 Wpositive for the year-do-date, including high yield.& ]6 {; i0 h9 ^ K$ q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& A% B" H6 _4 X; s. k
finding financing. C9 D/ w& j% T1 E/ `( V
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 y M5 Z/ U" d' F/ P
were subsequently repriced and placed. In the fall, there will be more deals.8 y" G. ?+ _- s1 Y+ u. \6 N- g# `
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# O) E7 n( [" \0 `9 d/ z1 N+ C- n2 Sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' o0 a+ T6 Q- `* j5 j @; rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( @: ?! o) f6 \. j# R( sbankruptcy, they already have debt financing in place.' J' [ L; Q$ w& q2 d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: e4 T4 B+ v3 e: \today.; b N3 j+ p4 C; [5 t5 u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- X" {: X) u* W% Z+ b+ y
emerging markets have no problem with funding. |
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