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发表于 2011-9-17 13:16
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Current situation
: k& [, Z6 Q% l* ]6 U$ ~ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( l% i6 q6 e/ t( w0 W6 X+ K% F% V0 L( kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
) B$ N& G. p) Y( n. j) ` \5 nimpose liquidation values.
1 y" X/ r" K" T7 y* U In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% b Z; H: A _, B7 mAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 e F+ y0 t* g0 |
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 h0 x- C8 H6 m9 G5 i* t
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 @7 @: {7 j# t8 n( N
' E8 [& o! Y# [A look at credit markets
8 {5 H5 A. K9 O: |8 w- O Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in0 P, x2 c" i( z
September. Non-financial investment grade is the new safe haven.6 c' X& F# r' _1 [+ L6 [9 T5 A
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%: \8 T5 o' F8 y
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1( C& z+ z+ }# ^) D
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have9 }7 v; {7 H5 u- G. Y0 L* [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
; H1 Y) ^0 c: c) N6 JCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* N- |6 J& g0 K' N. p! E/ B( Fpositive for the year-do-date, including high yield.
! I4 [7 G2 e1 K- a8 U Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ v1 I( D7 v+ w* d
finding financing.. [! |- R' K$ F5 A/ X
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ q m4 v- r& w6 n& Bwere subsequently repriced and placed. In the fall, there will be more deals.
. X5 c8 u; t% u% @ J Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 b# o9 x; B8 jis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 K6 m9 }& Z7 qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
4 O6 q3 Z5 x, Fbankruptcy, they already have debt financing in place.
- o( \$ a* d' m! R! J European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain4 C9 V/ l( @; {3 c
today.1 k& K6 v+ p" H& ~7 t; N( D
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. i% j& _: a1 H, A& R. U
emerging markets have no problem with funding. |
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