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发表于 2011-9-17 13:16
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Current situation
3 ]* \: z+ n7 g3 j6 ]- G9 E5 d The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
H9 m$ f# _- V) }" T) T4 Has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" }+ i) E |; V- q' ` Q( }impose liquidation values.8 ]0 J7 g6 y! ^. Y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
0 v- }* J& [/ t, iAugust, we said a credit shutdown was unlikely – we continue to hold that view.
0 A1 B* D/ y1 f: n- Y0 j) ` The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' ?5 }3 T( j: s) m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
! b7 z1 ~( m* N Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 H \$ d7 B9 S1 {+ Y$ n# S; cSeptember. Non-financial investment grade is the new safe haven.
5 k& b+ ?) `! k' X, p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
& R0 c* ]" r: d8 G. e" Q3 Dthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1' S2 C& P! z7 |0 q) j
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ U9 z/ i# F* Z0 \; e. y0 `( c) vaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
^+ }7 R) p" k. Z- p0 hCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 d' d" U% P) w: K8 r% t/ Ipositive for the year-do-date, including high yield.) b- m+ q! Z0 S
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& m( \- @/ a _3 ^% yfinding financing.
( ?4 O" i+ c. i' ~5 G Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- i3 G9 o6 n9 |+ [* e% l9 _
were subsequently repriced and placed. In the fall, there will be more deals.
9 M k2 ~: z( N; P+ G4 R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 Y2 g! _4 s1 l1 n; r) v4 V" vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: O0 V% l& ~" u' r
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. ~& N I; u, Z+ t
bankruptcy, they already have debt financing in place.
6 L- k' x0 w3 o9 }5 |9 @7 J European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 z) k1 r" w' h$ Z! B
today.. ~- u ?0 S3 [/ U
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 h, D" a/ c$ r3 @0 o$ @9 A' d/ [/ V
emerging markets have no problem with funding. |
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