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发表于 2011-9-17 13:16
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Current situation& L& j, W/ i( Y; B- L1 M/ J- e
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 _( ~) w4 ?; r5 r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 w! a" X1 r1 ?' h
impose liquidation values.
: X8 O" T( L x* R: X! P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! v' M% h% x8 R; S. [8 GAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) a3 d. R4 o' `/ ~' X' X The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 R h" ^/ N( C/ h$ f4 H/ hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
2 k- T6 ]$ O+ U9 A" s
; t& u3 e ^3 c& v. U1 F/ W# zA look at credit markets
3 _# Q/ k% H) d2 k* E6 O. ~2 {# F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in$ l- l; c# J9 I- B
September. Non-financial investment grade is the new safe haven.
8 x$ `; e6 s) p1 e High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* }# i8 o6 T) \5 h0 Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1# \4 T) ]* s+ Q" B1 P0 T1 G
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have: v, ?0 _. J* g# _% p8 Y
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% M4 U6 u( E! X: q8 @& [CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 \% ~) P" c' X% wpositive for the year-do-date, including high yield.
2 u6 g t1 H& C; Y, o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
, L" i! v4 V, ffinding financing.
z7 ]6 ]# K1 B# a Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! h& v" R! g( [& C$ y* Uwere subsequently repriced and placed. In the fall, there will be more deals.
* ?6 i$ p. s6 ?! H7 [5 q2 |1 L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. v& V, h' y* f. y- {! y8 Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ ~' }( _* L6 l
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( [8 t: t3 G3 d& ?bankruptcy, they already have debt financing in place.2 }" K( ~. L# l4 t0 r+ s( `/ N2 p" m
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 ]4 R- m+ c S$ Y* \( J
today.
* q( G8 @& Q8 g9 J3 A5 C7 T& }7 D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in9 e c4 C6 \5 R9 g
emerging markets have no problem with funding. |
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