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发表于 2011-9-17 13:16
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Current situation
, s) T& p* o% q$ h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
{) I, s9 P) ?/ v, c6 S- W$ R8 qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' b( w9 ^$ b/ ^2 c, d7 timpose liquidation values.0 e! A4 r: F0 v- ?1 }. E: K
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In: F4 Q1 q# o1 e5 W6 W- h! ]& i
August, we said a credit shutdown was unlikely – we continue to hold that view.& Z: h( O" Y1 q# r( _# x, @+ T9 y
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 F) L" S+ H% f; N1 @. Hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 ~7 y U, t6 W4 @9 C
( S2 Z) r8 I) p) N, x: L8 S% KA look at credit markets
, U: r8 H/ L1 \$ _$ H3 ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 F$ h& X# W& I. y2 X% P0 s' ?September. Non-financial investment grade is the new safe haven.
! s5 ]2 [, f V+ U6 {/ _0 x High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, A% y+ M2 N) t) F. b& v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* w" A S: [" f$ w3 |& w1 Dbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 r# U- [; h6 {( l! [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) J1 e0 ` m4 h" l6 C
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 D* g/ C( X" ?
positive for the year-do-date, including high yield." R; Y' x3 a& b" D* \ v
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 J, G9 R7 n% D! o. D* K( w
finding financing./ v) P% N, ^# h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ q' Y& j! N m9 e& W5 ]$ a& Z
were subsequently repriced and placed. In the fall, there will be more deals.& N: e# R, l$ R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and5 t3 H5 E6 p' t, n0 S5 j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 Z/ V6 I3 t1 D% Xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 m; h. K$ `( ^% n! @7 Q4 {bankruptcy, they already have debt financing in place.
2 D \4 q1 {( n7 Z; p! d European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( n2 A5 O- B5 c6 E$ e5 i6 htoday.
, {! [9 X* ]% u6 r. C Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 q1 Z7 U) ~$ u+ b0 D
emerging markets have no problem with funding. |
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