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发表于 2011-9-17 13:16
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Current situation
* ?5 C0 ~8 J- f The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- |4 S* i. l! w, N+ ]% o- ?0 J. j
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
5 g$ P$ P V* ximpose liquidation values.
0 w1 ?/ y. L; ]! u1 B2 L/ [ In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
E* r$ E. t$ N+ G5 ^' h3 N* EAugust, we said a credit shutdown was unlikely – we continue to hold that view.
* O- c. n2 C( z# } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 q& J- S' }0 x: z! z" x
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 @7 U: q/ w1 b& I& {: W
" R2 _5 |+ ~% \1 K8 g- v" FA look at credit markets- G# H' E" @: {4 C
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 v* ?6 }9 |6 V( D5 ^: S: D0 }September. Non-financial investment grade is the new safe haven.
4 R8 l' m# W- u0 n( J2 D+ m! J7 i' g- l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! B4 @! ~2 M* j2 z
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 @- R8 M2 h6 A- Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# X; B; q2 W; P @/ Y& K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ {+ ^; ]* v: F! n
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# |+ b* w. x7 O4 s
positive for the year-do-date, including high yield.
4 v5 b7 p; R ~7 g0 e4 U Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
) Y/ ]( b2 o3 `# _ {finding financing.
p/ J/ ]8 G* m' E. o0 T1 F Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ W' a; I5 S! B' s2 {' `# Zwere subsequently repriced and placed. In the fall, there will be more deals.! w# b( D) y9 ?. H9 w& ~
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and2 D- H# u; a# Q' n, A1 ?7 n
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& y& T/ @' I, zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for2 V/ |5 s; z3 u& D+ w$ r+ K3 n: c
bankruptcy, they already have debt financing in place.
9 ]3 U r8 w0 }' O- c: o European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 K* `; M8 e0 Otoday.; g! v D2 p+ D: E: S1 i) p& z s
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 ~; U& W5 f6 H L, }8 R Gemerging markets have no problem with funding. |
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