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发表于 2011-9-17 13:16
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Current situation
4 _( {" N1 D8 S6 J9 P6 t6 r! G The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long% P* y: I/ ]# ? m( ~5 q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
* e% j4 ~& w2 F% u) F! qimpose liquidation values.' c F/ g" D' i- e# r; w- h8 y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' R+ y9 X" u% F! o4 \+ x. i
August, we said a credit shutdown was unlikely – we continue to hold that view., R( e' E6 e7 I O6 f4 j
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 h1 G7 W+ e3 b. {3 j0 N. F/ J
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 \" p# d+ U2 X
( r* D3 N7 C, ~% n% Q- {A look at credit markets
- e1 s$ `$ K8 `! i! e9 t' ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
4 i1 Y! r. S/ k4 rSeptember. Non-financial investment grade is the new safe haven.
/ l, z1 |# D( P5 z- h6 \ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! g" |3 v& P- w$ X
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
; ?4 R+ b$ y' {, I1 r, cbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: N+ Q9 a9 m* _9 @" Daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" x9 T# d' ?" J. b# QCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ \) G. T8 e$ |1 E4 E* T
positive for the year-do-date, including high yield.; Z+ ]( |& A3 a% b; x& i* O# Q) `
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble. |7 R/ k z, _" g6 X
finding financing.7 ?6 n9 ?0 D# w$ h# y- k
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 _+ z! z; |, l0 T, {/ [, a
were subsequently repriced and placed. In the fall, there will be more deals.
5 C' k; m1 n1 A8 T5 d. Y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( k3 M+ \! ?4 [4 [5 T2 x9 g
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. H$ J& f+ P; g! t& Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for9 f; ?* t. u4 P3 a3 q
bankruptcy, they already have debt financing in place.0 H: ?8 w9 [' S4 `2 A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 `0 f0 [& v& W0 k
today." _# I: k8 D- q8 G' f( \' b4 d
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 R& I. K; U6 I& v
emerging markets have no problem with funding. |
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