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发表于 2011-9-17 13:16
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Current situation
: O, |9 e# n6 L' j S* T0 P The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 P2 m, w" n5 V- v+ Kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 L5 y4 Q' t6 w4 e+ e- wimpose liquidation values.& {7 [- |. F* v* C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 A" Z5 @' l/ a
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 `( f2 g) T! | The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 ~1 y( [/ t" e( \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 { j6 A2 Y1 p5 O1 Q# b; J9 Q
( t8 b0 V3 f9 I. U( |; QA look at credit markets
5 p0 E7 S. q' b; l: X6 K Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: p& f0 P, E9 _; l. p( ]! J
September. Non-financial investment grade is the new safe haven.
1 H! [5 Y5 o* W g* r High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
: |: ?6 I/ k) K! Q. _then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 z9 u- H: U; e
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! V) E; {1 Z& Z/ C8 Zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade4 b3 K q$ j" U( u6 P! U3 r
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 i* Y: H) H+ p R" lpositive for the year-do-date, including high yield.8 }& }0 Z) C) B9 @: |& p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 F4 T8 [, [8 N2 Y6 F" c* d
finding financing.3 i1 S7 ]0 _+ e- E" I$ `2 q/ X
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 B0 g% J1 H7 k2 w% iwere subsequently repriced and placed. In the fall, there will be more deals.
7 U5 b4 e! ~/ I- C$ g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, m# `( {3 u6 l4 M3 ]! yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% _' ` X+ E* K3 i$ z' Igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
) c- P. B% w2 [" P2 L9 E* U" j' Lbankruptcy, they already have debt financing in place.4 g, C, {7 g) g, u; Y' x4 t
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 k+ H3 _- p+ z4 J: j3 P+ y6 P, |today.
! Y- ^1 D- _; t Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in: M0 _! s) ~2 t8 u) i
emerging markets have no problem with funding. |
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