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发表于 2011-9-17 13:16
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Current situation
* U |9 D* y! D, ` The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ u! D2 e. h$ O/ [2 G, J* a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
m9 K+ J0 B" J1 `+ yimpose liquidation values.
- m. f: y3 r, W, c4 I0 U( v In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In% o5 ?" M# K" _6 `% C! r2 x5 j
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 g4 L! [0 B( ^1 `$ h6 L The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension3 L$ k5 C0 G( [. h) C M
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! S/ K8 j3 L/ P0 s1 x
0 O" t* S5 N# X) T5 k1 \% }- u
A look at credit markets9 K8 W; @) G2 h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 o: ]/ d$ X8 k" b+ y m# b
September. Non-financial investment grade is the new safe haven.) E; q/ i0 s3 [5 ^% |1 s5 U. ]/ A1 R
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, l3 R; }8 \; M* C1 G
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) w/ Z; S$ z* c7 f; pbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 u R3 K' Y1 v# H" W
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ Z) G- Q) V3 |# d0 cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ j2 u2 ~4 z4 m% |$ J
positive for the year-do-date, including high yield.( @6 {6 ^2 J- [' a! t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble3 U) Y; z& |' s8 O* X
finding financing.0 g; M, z& ^: L6 W% Z; h
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they6 J& u. X3 x7 Z" b( Y
were subsequently repriced and placed. In the fall, there will be more deals.. w) ], `9 ~* D
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ m; E+ I( O) K2 O$ Ois now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
# z. q4 d2 p% tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for3 z! q. s3 k# ~' Y
bankruptcy, they already have debt financing in place.
6 G F; U, m9 h w4 | European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( a" J/ r) V# J1 w, ? stoday.
! Z' N. Y* K" [0 c1 G# i( I% y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 c' x7 h7 W8 K+ y" e6 Oemerging markets have no problem with funding. |
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