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发表于 2011-9-17 13:16
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Current situation
. S3 h# p$ ^: S) J: ]# N The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; G, `1 u5 R; _' X8 e' ?as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 D2 b, \' G0 W" B
impose liquidation values.5 m! X+ J6 b* N5 j0 V
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In- @0 `- L4 A# {; c Q T9 {. {& z
August, we said a credit shutdown was unlikely – we continue to hold that view.( s# M5 W/ h" Y" R8 K5 r/ ^$ ]
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 `6 }' P( J( \8 w8 I
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) j/ i( M+ T) T" I- ~$ E1 m
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A look at credit markets; ?! s' L" \# z4 f5 I8 V: y9 S- c
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, L( I5 u% m) J. Z( \" P
September. Non-financial investment grade is the new safe haven.
3 [- C) E; m- u1 k6 p High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 `: C( y: h. [+ u3 Vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- L2 a: x) Y) L1 w# Ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- r3 ?# K3 L4 U, A9 N0 z
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 F$ I* L6 _+ PCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 x+ K2 J8 \+ J8 B, x7 d; i3 X4 bpositive for the year-do-date, including high yield.
- j q* e- {/ O3 A5 E ^ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble9 \! ?8 L& H: f1 u _, I1 l! ~" ~$ }
finding financing.
4 c3 }! m1 q3 E( v! [. `5 e0 N- L Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they0 V3 ~' @% E: i0 b8 T* ]
were subsequently repriced and placed. In the fall, there will be more deals.
/ k, p5 A1 v0 x* {8 ^9 x7 E9 J* T4 T3 R Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
$ y; k9 q9 f2 ?: b$ x" Q% Fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were5 d# Z% k( G* o7 s# h4 K: N
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* B+ @* e7 H7 q7 B0 n+ e
bankruptcy, they already have debt financing in place.1 _& d4 S0 J5 I' { w: c! {- ?
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' F9 B" A& P" E% B4 ctoday.( `/ ^8 q6 Z" y; ?
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 i1 K+ n" W9 p0 k% d+ x2 eemerging markets have no problem with funding. |
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