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发表于 2011-9-17 13:16
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Current situation
8 [* Y9 ]4 n6 B The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
' h _8 m$ S3 a$ t: X' aas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
0 k. K# X% _7 h! c# Eimpose liquidation values.
" i4 y4 t5 @. L& a( a |- g( v3 h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
( R9 R8 f" A3 T8 e# A) h$ cAugust, we said a credit shutdown was unlikely – we continue to hold that view.
) X( N* F6 E& C+ I6 P The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
' I! |& `/ r8 a2 v9 i+ fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
$ N# [7 N0 |8 y- H
( ~- g1 ^: m! @' Z1 A& PA look at credit markets
- p1 @# q7 o" P" m Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
/ G7 ?- l& e$ [* x9 `" \! f: `September. Non-financial investment grade is the new safe haven.) ^/ o+ r* ?+ s! }6 U( }9 t
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 ` a6 f) \8 n! |; }$ J' o/ O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1 D& l! L, X4 E+ |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
& `' Q+ K- I s$ D% A8 Q! U( b& faccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
* N) ?! l6 G3 b& \. ?CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are7 V8 u ~+ \( M& B( u( z, Q4 y; g3 v
positive for the year-do-date, including high yield.4 |- }) `9 r+ ?1 W, z5 `8 y; J: _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& x5 X# h! |+ h+ ifinding financing.) F; o# m6 N0 q& g3 Z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 H' p8 d {' x4 xwere subsequently repriced and placed. In the fall, there will be more deals.+ c- `9 p2 y4 E8 }" O9 p0 Y
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% y# Y" U+ o5 d& }is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 [* u7 K0 t+ _9 ^# tgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, C4 ^# | T+ @( \
bankruptcy, they already have debt financing in place.2 Z/ a6 ?1 Y; I) c( g9 P" v
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 P/ Y1 `2 X+ e# _1 W+ j: Y) qtoday.
+ w8 I) b( B0 o$ l+ u" @; M9 P5 J Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in4 j' v+ N, K, d9 f' a" q5 |
emerging markets have no problem with funding. |
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