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发表于 2011-9-17 13:16
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Current situation
" s6 ` i5 w5 Z' E- s The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 T& S% L; ^: h! a! P, Das funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 Q3 v7 @- U/ g/ A
impose liquidation values.
; Z( v$ c! R E" s In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# G |. |7 p3 ^August, we said a credit shutdown was unlikely – we continue to hold that view.
0 y9 f9 ^0 p9 K. P% K The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* p2 ~5 C) `$ C+ \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% B& [) z/ g) z5 _8 b% T9 I5 ~1 u* @
A look at credit markets3 b1 V- `6 _2 T' V/ Y
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in: S5 U8 }2 E4 n* s9 {
September. Non-financial investment grade is the new safe haven.: I, Y. ^1 c3 |1 s# M0 W
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 b' k2 N. N/ J7 |then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% Y7 a B2 h; a8 a' z
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 ` D, f6 j; N$ aaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* N% s5 [" r1 R9 L
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
# X$ ^9 y# h% G% f" mpositive for the year-do-date, including high yield.
E4 G. z: O. C" H Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
. G' Y$ v. E* `7 p }5 @; \finding financing.8 b" X5 @- k- a! S) A) G4 ^$ L3 z0 g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
& z0 G! A) N0 ?0 C* Twere subsequently repriced and placed. In the fall, there will be more deals.( N4 E( {. E' e& i( [9 w0 r7 U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* p* [' ]! c% |, nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
2 }5 g# `, R7 y( |8 Y; e5 Ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 P( {& E5 Q) C" L& o! {# r# H5 v1 Pbankruptcy, they already have debt financing in place.2 E; i6 \: B. u
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ c# p0 n. f7 T( B) q1 y7 @today.
/ Y7 s7 j+ v7 n- [) Y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in2 x0 J2 L$ `$ h& v7 h4 I9 P. e7 C8 @
emerging markets have no problem with funding. |
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