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发表于 2011-9-17 13:16
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Current situation/ ~1 n! F) b5 W2 h# Q0 d |
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
9 p- r* L( z) S, p S9 S6 g, bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" B4 g$ H; i0 g# G; t# m: c9 Timpose liquidation values.
1 M" i: B2 t8 H In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In# g/ D, F# ~$ o- a2 {" J$ t" I
August, we said a credit shutdown was unlikely – we continue to hold that view.
2 Y1 W' }. E: x5 X The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: `$ e w6 V: C: W4 k% I2 p1 s& nscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 h& @3 @& t+ j }: z
- ^$ c9 b) I, z hA look at credit markets
' G8 H, Q; t3 X* z! {# H/ N. N5 p Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; Q; Z$ D1 x/ I, W8 r" x
September. Non-financial investment grade is the new safe haven.
6 i! ]* ^/ \8 a/ I# w High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
! k$ h4 ^1 t4 z2 s+ ]then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
/ s- J, U5 R+ e# [) Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
, O, [, U) a1 H# m- Saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade+ |$ ]: ^: D; b4 Y: |1 c2 Y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 p( \: [; s: X ~0 {positive for the year-do-date, including high yield.* a2 _: m+ n" w' u
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
9 u0 f J" k1 m- n! }finding financing.
3 U: [" V2 x- F* }& f, V Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' s- \) D l* mwere subsequently repriced and placed. In the fall, there will be more deals.3 V8 A+ a* d# Z$ Z
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' K; m n+ a1 H. q' Xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
& K. _1 H$ W, f! Qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 v+ f( U/ }$ G% o$ C+ vbankruptcy, they already have debt financing in place.' x, ?7 M0 j( i; R4 d: t6 m L
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain3 i8 V2 f& m( W" C
today.3 @% G- U. @$ Y/ {
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in8 D8 t% a* ~7 T8 `" v6 U
emerging markets have no problem with funding. |
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