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发表于 2011-9-17 13:16
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Current situation
3 b4 l7 T4 k, h T The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ J6 I$ d8 C }4 m
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" G* A& I( h' Y: ]0 y3 Z3 gimpose liquidation values.
2 U6 R0 @, w) p3 e: v; { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ Y( m& H3 g! Z6 {% J" X$ B
August, we said a credit shutdown was unlikely – we continue to hold that view.
6 l0 L9 x. q: T5 f7 u The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& ]) M. ~9 m* k* C# H- o; m7 H
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# D* J! X) A! m
5 } b- x6 M5 O! c% MA look at credit markets
3 i0 G. V9 R$ F) L( y3 H- h Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 w5 D) t, q5 @5 a, P
September. Non-financial investment grade is the new safe haven.
! \# l0 G- R0 e. C, Z1 f9 J3 R+ A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 [$ d6 B, \) n
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 o2 c; ]- T0 b }: N7 \" h) p( Nbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 B) i. V* B+ B3 g1 o
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( }! x( f# M# m! b- `8 N5 G, s8 f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are* y7 j4 w1 f' l7 ^# h! N3 l
positive for the year-do-date, including high yield.
' }8 v1 a6 e7 @7 K Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
! t3 B4 ?+ d5 i Wfinding financing.
! d3 ~6 m$ q7 I o4 i Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ A& z9 A' k$ y5 {1 @+ l. t% a" Cwere subsequently repriced and placed. In the fall, there will be more deals.
F7 w8 i; g" O; [, h6 \ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. H6 L; B7 X- k3 _/ P' w @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* v& m3 L; B/ ^7 z- v6 n% qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 k2 T( d( H0 s. Y; l
bankruptcy, they already have debt financing in place.
; i) c- n; ^& [% r* m' J6 s% | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ x! O6 P! C' V' B7 k! `today.* g# s7 y8 {; X( J6 p9 ?7 ]; I
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in% c0 Q- K. _. H7 P5 t
emerging markets have no problem with funding. |
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