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发表于 2011-9-17 13:16
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Current situation
) c( c( l5 L1 ]/ B7 ]3 T The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: z9 T) b0 `( M& r# b& e# Y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' p! i: T( r! ]9 `impose liquidation values.
8 ^% q9 g0 U+ x9 ?9 S- i In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; o1 y$ L+ ?7 ~; K5 p
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ h6 S1 k, V& E+ M5 T% X' O4 v1 j The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ c; @3 `! {+ D7 q4 g' j$ _) y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.: G0 F$ l) s: S/ U6 ]
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A look at credit markets- G9 c1 \4 e- O8 W7 A) H3 d4 r
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
8 p3 f" v/ g3 wSeptember. Non-financial investment grade is the new safe haven.
( w/ X% t9 [" u1 P7 m High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. M7 P. f$ E- E7 sthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1! i5 [5 W) s8 O. E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* B/ n3 C$ Q+ @$ L7 B7 y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" E7 v/ x* E1 B: \4 ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ R- g3 y5 s$ g) X' U, J. Dpositive for the year-do-date, including high yield.# v3 r. F" o8 b8 D+ ~ P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 O W5 B& B1 }) _ ]. G2 g+ B
finding financing.$ T2 d0 W* T6 S# r S
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' g, N( W R. c: O0 g
were subsequently repriced and placed. In the fall, there will be more deals.
! {5 B4 y6 @0 `+ ` Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 |6 V+ ]. {0 @ i3 [$ S* eis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were; D6 ?0 h* M M6 {/ d: F
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
: J! A. Y2 M! a1 P' p" W% ybankruptcy, they already have debt financing in place.
/ w# b0 h9 q# k( N European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, f6 y$ c+ A* l+ l3 ttoday.
3 M" S0 j1 d" A, y L& M( |3 h- R Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 U0 t' u9 u3 J1 Q
emerging markets have no problem with funding. |
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