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发表于 2011-9-17 13:16
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Current situation
( ^ E: R( S2 H- i# x% R# w The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long5 T- g; I" y: }2 l; j6 Z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% Q5 h! @3 K `& e/ ?; k
impose liquidation values.5 D1 m( \0 J" V7 P+ j2 x) ]/ w7 k* C
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( S. G. {; v' Q) |, E6 Z' d
August, we said a credit shutdown was unlikely – we continue to hold that view.
. M& x1 Y! X: [3 p& t The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# B- n: X0 w, A5 v' H
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.7 }4 O4 J- y; i6 y
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A look at credit markets
. w$ t7 H5 z/ ^' \; o9 V6 N6 r4 ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, Z M. L! s# W5 A% Q4 ~
September. Non-financial investment grade is the new safe haven.
9 n; l2 c, s; r# O# a& w+ Y High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! E9 p) b; F4 J; e" F. u) u0 Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; d$ q# o8 C1 S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# @- o4 _% g& m! |2 Paccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- F2 S& Z- f T/ b1 o: W; z# J8 P. p
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. u& z% [1 @8 Hpositive for the year-do-date, including high yield.
+ F2 g/ g4 S! I* d" E0 F2 T9 M Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 g$ Z7 }) Y, G' [) @
finding financing.
1 G7 y9 y( s G- p' h0 J) X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" S6 R; o3 t7 R. C) v
were subsequently repriced and placed. In the fall, there will be more deals.
3 G5 @7 U6 }" Z8 ~! S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! @3 j6 K4 S% ^8 K/ a' ]is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
6 Z1 A! v/ U" M" r/ ugoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( w" ?! U1 E! E1 z! A2 Zbankruptcy, they already have debt financing in place.
" `% u4 H) y; W' A8 p7 y' d, V5 ^ G European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain1 T8 w3 Q0 u5 j( K" q" W# c
today.
# i; V! ^. K) R* U; L7 f Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
/ E9 R) i" y/ M4 r7 kemerging markets have no problem with funding. |
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