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发表于 2011-9-17 13:16
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Current situation
4 J6 U( u, U4 G" G% b. B+ ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long4 o+ w( f7 z* U- R6 K
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 \0 ]! A& l7 g9 V p3 [4 D qimpose liquidation values.
5 g- T- W* s: l6 U In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 B. P' H! ? t8 A$ j0 C# sAugust, we said a credit shutdown was unlikely – we continue to hold that view.
% E& q$ H; ]' w3 n- R" E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 ~! {/ } u+ Y0 w6 I+ Kscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.9 ^' w2 j @2 z9 y; I- E( w
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A look at credit markets( w( s% g1 W, d' E3 C
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
, [7 m& X; ]0 _# B1 ESeptember. Non-financial investment grade is the new safe haven.
( g1 A* r" T1 F3 x# ] High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
- b/ |9 u. X) l6 x: ?! p2 o7 rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# v" Q/ a1 ]5 W9 Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 K; `! `7 P5 U2 d. b! u5 V2 A/ saccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( r" h$ j |4 L: j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. D% B' V. u$ O6 o2 xpositive for the year-do-date, including high yield.
- `& y y3 u5 ?& R. U$ I5 T Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
: ?6 _6 K- Z% e5 wfinding financing.
5 A5 k- G, h: a$ J' _ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% E) K! P2 G7 }( H/ L
were subsequently repriced and placed. In the fall, there will be more deals.
! M6 q+ e/ e) h+ C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and% i( u0 h" F6 d% w
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
0 o4 ]# `) f6 H6 C1 ~going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 z$ U6 F5 p& z
bankruptcy, they already have debt financing in place.
* A' @1 O& N! G4 y: }$ V European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
( I8 ?, a/ G8 ~* O' L. ^today.
7 G* v+ f5 U# B3 c$ h Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, ^" r5 J' w: e5 `) ?, Nemerging markets have no problem with funding. |
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