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发表于 2011-9-17 13:16
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Current situation+ W$ D/ V- Q B- |5 V
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 ]0 B3 N. u/ |- H7 S6 F4 ]/ X3 V3 H
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" y1 U! ?4 ^# y" O l& o" e& X. E
impose liquidation values.( N# k% V9 a& }, G: I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 P+ _7 x) W+ T) a! o' AAugust, we said a credit shutdown was unlikely – we continue to hold that view.
8 N! `1 r7 A) Q! r# y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension$ b, O% T T1 M7 K2 y3 } v1 g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ P3 L; Y% w. h# W
4 G, [! i( z4 r* o: T. _- `4 EA look at credit markets# X q# U) D( C' l4 T' m! C
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 F- p( V. i4 L6 @2 k( p
September. Non-financial investment grade is the new safe haven.
5 k* y' Q! j( F& f$ r7 Y8 D High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 t, U, V+ O+ B" |- `/ Hthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $14 C7 A+ h' A( p& @* t
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ I X, Q( D: [" Haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- }' M4 O* I# `; g2 {2 J6 A9 dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 T9 a: k% @7 Hpositive for the year-do-date, including high yield.6 R2 B! J& ?2 v) w4 E% \9 t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble& J+ i) A$ B/ B5 V1 }) R U) O
finding financing.7 u8 F+ d0 }; N) J
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 f( P+ C6 a6 u, K
were subsequently repriced and placed. In the fall, there will be more deals.- m/ I9 j# i3 r% A$ A2 }* L b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" H1 t/ j% x* ]4 Kis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were' r C1 x ]# \2 S6 U, P5 l# j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 j3 G. B5 p# C+ w8 w8 C7 ebankruptcy, they already have debt financing in place.! r* P7 X+ b9 B2 g' O E6 T' @- z8 b
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 y. W3 c4 ^6 ^ {% \7 _
today.
% z3 X5 Q- ^6 O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 r6 Z( k) z' R5 X6 T- F
emerging markets have no problem with funding. |
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