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发表于 2011-9-17 13:16
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Current situation
* b- Z) j: z5 t& j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 }$ m( |* }5 L) Z9 Bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, t* Z* Q0 ?2 L9 j$ n& limpose liquidation values.
& U: V- u6 N8 `& t2 N e" L In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
A7 a" W5 N2 u% X2 x! `3 _August, we said a credit shutdown was unlikely – we continue to hold that view.
0 H( C, @- c9 i! Q, G; `4 `2 B" u: O The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& c. {7 k; W- U$ a* s ^$ }scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.2 S' V( d; F0 C) U8 @9 Z
& K: a5 U2 F8 E4 ^! pA look at credit markets o. k/ Z' Q: ?/ y7 E Y; F6 Z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' e# j) z+ y% v8 y! dSeptember. Non-financial investment grade is the new safe haven. o5 @. s! `1 c9 [: V( |
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, Z# n* O% K: S- zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1, U+ ?6 w! L' J% x0 c) d
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 ]5 ~, ^; \% n! a7 U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# \1 Z; ^7 \& U9 QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" Q/ b2 T5 l* ~/ ~. q: P% h I; Ppositive for the year-do-date, including high yield.
7 F7 {1 Q- s2 b X Y7 o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ ~# H! o& ]* b: P. d2 i
finding financing.* Z/ V4 D. R* N6 R, C
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 A0 l7 @3 W: r- P' t1 fwere subsequently repriced and placed. In the fall, there will be more deals.0 M9 |- L- j: U$ R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 c% ~! [% W. z/ M) g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ ~& E# J" ]/ j, r- F; r/ y' {6 vgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- T0 j& n" J) }3 B
bankruptcy, they already have debt financing in place.
1 G! Q; w% u5 ? European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- L% @) p V7 n" K6 s6 P
today.
: g# I Q" p; P4 e% {% \! { Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 W; B$ o3 m) Q) Hemerging markets have no problem with funding. |
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