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发表于 2011-9-17 13:16
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Current situation
$ I* M% u. b% [6 ?5 I! P2 b! T4 J The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long! Y% B Y$ U- T [
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
/ s( W! `' H) R& O% f/ m8 o8 o6 D) l8 Yimpose liquidation values.
* K2 D2 X- X; I( E2 m& q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. } r8 g6 V6 w# G/ [' D
August, we said a credit shutdown was unlikely – we continue to hold that view./ z* y; c n0 G4 u- H( d& K
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
0 X% \9 S$ P. C; l3 uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
7 T! v! \7 [- i4 U) f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 ~! Y5 ^- v. J( Y1 M1 F! QSeptember. Non-financial investment grade is the new safe haven.
1 |4 X' E# k3 W: b6 ~1 x7 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: \; }7 L2 U; ]+ ~; @% v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 l. x& C7 e6 v$ Z$ d8 K2 N+ ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 |+ H9 \, B$ yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 t* y& v8 A9 _0 {) E( ^CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: I- X+ C9 a6 g' L6 n* E
positive for the year-do-date, including high yield.
- R" u: ]0 {$ c! y* k Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( R2 ], a& X) g
finding financing.
" c. S* m3 I7 ] Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 e5 J0 p) ~3 u' s8 Cwere subsequently repriced and placed. In the fall, there will be more deals.
8 D6 }; ~* Z" r6 @/ p Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- e |( ^$ L' W# }- e1 K, r
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# ?: z$ x" ~ f: \1 S, x2 Bgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. m; b: x& d7 Q. nbankruptcy, they already have debt financing in place.
1 p4 [3 p% G3 N2 ?4 J2 K European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
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 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. _+ H/ i; S0 i. c" V/ g
emerging markets have no problem with funding. |
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