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发表于 2011-9-17 13:16
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Current situation
$ u* e& _( { Y9 I$ n6 ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ l! j) J* B( j) b; _. W
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: o) w0 \& ~1 V2 M% Q
impose liquidation values.7 L& M4 w$ F! |0 t( w2 B
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! Y F5 a7 F6 Q9 J1 S5 W8 NAugust, we said a credit shutdown was unlikely – we continue to hold that view.) o8 I i6 n6 [, [+ q! }8 n+ o
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 t7 D; {& f* w$ E# \7 b
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) j$ C8 N6 n# s; d+ b9 V
1 w$ Q l' d* v- D
A look at credit markets* Q8 z: m% c) S; M5 t& I5 i
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in1 V# E* M& V( a* j- |
September. Non-financial investment grade is the new safe haven.
' y' I' B5 n, H+ B3 e; P& X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
; m, o" m! r, m) |- a" M% Othen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" \% h# W2 t6 T% j# \billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 y s, j9 q6 ~: l- eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
8 m) d/ w& {4 Q8 ]5 s& `8 u) wCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ M7 x* k) A! Rpositive for the year-do-date, including high yield.' n2 E* R+ K: t( V
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 ~, I: x0 s1 n6 I" P
finding financing.7 G. v. ^8 O6 [/ |
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 S2 H. w# |% \. y# ?were subsequently repriced and placed. In the fall, there will be more deals.
( P' |$ x0 u( C; y6 W; q n Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
) Q H. E" R, F$ C" b* q+ F$ Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
/ |; j$ @4 w1 a5 A* U; h6 _9 Mgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for# K) h# f/ Z% w& y% E
bankruptcy, they already have debt financing in place.
, U; Z' n5 S2 F1 g" y) D European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ r. d, Q+ j: G, @7 j
today.7 Y1 Q! f, @! P) D! e4 e
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 w& a9 ~1 m# A5 R4 Memerging markets have no problem with funding. |
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