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发表于 2011-9-17 13:16
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Current situation
0 x' J* B8 U! U- E( F, B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ N) \( C1 r0 v: K, W! B, D; was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" T3 X: J- m" K+ a# p0 E" a
impose liquidation values.- w5 L% A/ a' ^( {+ Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In! j* s2 b; @9 P1 A9 o
August, we said a credit shutdown was unlikely – we continue to hold that view.' {7 [: U' \0 |8 a. R# E' \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 Q; D, K2 E! C+ w# C% V
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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- Z) B0 L" [) k! j9 tA look at credit markets
# e9 H$ ~7 A {+ b0 G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
3 M: e% i8 r( S1 mSeptember. Non-financial investment grade is the new safe haven.
# ]1 O5 l4 _9 D, k$ D( ` High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%# o$ Z5 w6 a$ S# Q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
. s/ p; O4 e, ~$ e: ?- q: `* ~billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 E) |! i7 f. G! b
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. Q+ ~ [$ L; d
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
7 }) n# @; P6 n+ [. v; upositive for the year-do-date, including high yield.
6 C& ^# L2 F' e+ E; u5 G1 D5 Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ O* M$ w5 F2 _: tfinding financing.$ Z/ H* T. \4 |) J" `! n' D) U
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' h' e% \9 w/ E H0 L8 b4 Q
were subsequently repriced and placed. In the fall, there will be more deals.: b c% Y3 {6 F+ f4 b7 g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 N! y1 }5 J9 t
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! L* ]3 ~( N. y0 [) \ [. v( j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* x+ w' v$ M8 F5 ~" @- c6 v3 ^& a: Cbankruptcy, they already have debt financing in place.5 e. x; O- X9 d6 G0 S$ d6 D8 H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& c% |& c8 L0 N- r' E& _today." t X( I; g% t6 d% |
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, N. y6 g" y8 H# ^. w
emerging markets have no problem with funding. |
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