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发表于 2011-9-17 13:16
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Current situation
# ~1 |9 S$ ~3 ^$ L) Y& } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ ]/ @/ Q9 L9 I8 f7 a2 s4 ~. [% t8 h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
, n1 ~: x+ S. _- n. bimpose liquidation values.8 A. R0 u+ t* `( G. G+ l
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ G2 b' N+ U5 x" @6 x5 W3 M/ O9 _, QAugust, we said a credit shutdown was unlikely – we continue to hold that view.
1 Q7 q# R1 f+ M; k, z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* ~ x6 F! O% U: @9 b& p
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.# N3 V" f2 t V9 F% V
: @& a& C' X( X: OA look at credit markets
4 |& j8 U" H) c. @+ d Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in3 H3 X' ^$ S2 n
September. Non-financial investment grade is the new safe haven.( V0 x& s/ U' s9 O/ @6 Y4 J
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 I1 [3 a" ]2 K1 D2 {5 athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& y( N9 F- G8 ]" q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 h# m! }+ p( f" a) ~
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* E5 m( v- _6 K7 G% s1 S* ]6 qCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are) @% y) ]3 w+ ~) ~) _4 q
positive for the year-do-date, including high yield.5 @9 V1 Z* S, }% ]: w; n2 q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# m' l5 x3 ?& v7 N& B" }$ P' [finding financing.6 Z) K7 j0 ?" q4 C1 r' @
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 Q; [" ]+ s& P8 k6 @were subsequently repriced and placed. In the fall, there will be more deals.
! `3 M: L5 O6 q; T6 @: w Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 I0 c. _! [/ r; g; v( R6 A' x2 |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
, s8 ?. O8 K3 P p6 E1 ~$ ?1 [$ ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for5 n1 ]9 N3 E/ }$ c) ?$ p# w
bankruptcy, they already have debt financing in place.
; ]& l% L9 X( [7 J European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. \1 ^2 G. u! a5 j4 A; a# ^
today.# D: l! A( |, E# R' n
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in1 U- R% {" j8 C' I0 A
emerging markets have no problem with funding. |
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