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发表于 2011-9-17 13:16
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Current situation
0 f5 ?" v! m a( v1 z- j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 m+ e2 r. P. A7 U& F7 W) d
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may# Q3 J0 ~/ O: V9 n; C" |2 Y+ @3 \+ }
impose liquidation values.
7 P- t5 E% {" @6 f- s* N In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 M( d& I0 [9 ]* L% M. k( M
August, we said a credit shutdown was unlikely – we continue to hold that view.: |) d- V- M0 W# |1 {! Y5 r9 a6 A! U
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 \. s9 j" r6 g; b' wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ |& Y% T5 g; i$ L7 c
8 W) t! y) _1 i6 T& I( ]5 U# Y$ E
A look at credit markets0 i9 p3 J) X$ O+ @ W7 c7 ^" @3 m
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
5 p9 N6 x4 v2 V ? p8 WSeptember. Non-financial investment grade is the new safe haven.9 f2 K& V7 d! w+ r1 }# |
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%. y, ^6 {* d0 \$ t9 c8 h0 U1 `
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ s4 J. J- [; m% X* [$ W$ M" c! Ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 [3 w, a/ r' P: F) t
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ y _/ A! S: V; S" GCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
* P' l. s4 \7 j& Q+ u, t0 E6 V. rpositive for the year-do-date, including high yield.4 H; S1 j4 r" n$ b" R8 K9 n) u5 t
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble# x; f$ H4 n( B8 _
finding financing.
5 O0 g. W4 S' P& i5 _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ K3 H' z+ c% g- p
were subsequently repriced and placed. In the fall, there will be more deals.
4 R3 r! K/ p5 ?) F# y Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# b: j5 @* s' |. v5 o* i( ~
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
% C- n: l* }: r5 V/ xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 G" J6 F C6 s G: q C& ^bankruptcy, they already have debt financing in place.
8 U# A1 o2 \- c European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain/ z8 {% t- t+ {5 A: p4 r
today.$ E6 o/ N; y9 i/ o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' p5 _* q: d' h8 bemerging markets have no problem with funding. |
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