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发表于 2011-9-17 13:16
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Current situation* H0 q7 Z7 a% p& n) J
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
+ G) K. Z0 F1 A! Gas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: g& }0 {. p+ ]: w
impose liquidation values.1 h$ ~) ]1 f4 A
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 x, V0 D3 ]/ O P. e; u+ k {
August, we said a credit shutdown was unlikely – we continue to hold that view.
8 N8 K: z+ ?6 ]2 I( X The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension; T3 p, N* d* O1 w# N6 O7 A: h, |
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets., r0 R% s( c' m4 B, h
, X9 y6 h. X: V3 a) Y4 Q9 x+ n- e
A look at credit markets: A- G/ {" b n \4 C
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 `: p" T3 T( Y
September. Non-financial investment grade is the new safe haven.# q" @& b. q; V T% s
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ B0 S% b/ u) n5 \7 x) X" n
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: o9 }( _" h& ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ m- b" O: }: }1 s, n; B
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade1 i( L2 T- J% O/ l! x5 W4 b
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are; O* C: n7 d4 d# H# R1 {6 U$ Q
positive for the year-do-date, including high yield.
; ?: J" k' T, i8 E% L- l Mortgages – There is no funding for new construction, but existing quality properties are having no trouble$ `" @4 d/ {! \* k9 E
finding financing.
# b" Z( c G0 V1 x/ Y4 _$ x; A1 x Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% d/ g( r$ v9 `0 q4 ~2 ]
were subsequently repriced and placed. In the fall, there will be more deals.
$ w2 ^9 ?/ w0 R0 [ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 c% y* t6 J, k
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 z! ]/ |8 ^1 N7 [9 O2 ]3 U$ kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for* Y: Q$ }4 U' z; [
bankruptcy, they already have debt financing in place.
( }1 l$ Z1 G! C# M9 o3 N2 b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain+ D+ u ^8 J, G* U1 z2 q' L0 d
today.
3 c$ H& \: H! y8 X( W Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' r' z6 n# Z5 L, l7 j( uemerging markets have no problem with funding. |
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