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发表于 2011-9-17 13:16
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Current situation
) o j& C2 ^; |+ L* k8 I The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# Z* V; F7 ~# S& P& E7 g- xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
$ X' N s4 H: {4 W0 V( }/ a/ ?: _impose liquidation values.! G, Q ]5 O0 H: P
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
" F* N% f8 l- I7 l! C j: |, BAugust, we said a credit shutdown was unlikely – we continue to hold that view.; C) E: M( |( ^4 B" e& a8 @ c! V% ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension& Z9 E( I6 h o' O6 k, L
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! b/ ^. D1 g8 y9 [6 k2 w' \) I8 a
# F: d9 c' P+ D2 aA look at credit markets
1 r3 ?2 @6 B2 I% P Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 Q2 F( K$ ~3 F5 F% e0 c5 _September. Non-financial investment grade is the new safe haven.
, M9 X; p) {3 f# T High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 w0 s" B9 L/ Q9 c& P1 T: F) B
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! D j* S9 F* r: R$ {+ }billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' u L f( F+ Qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
1 X/ c" S, x2 L# W" i) wCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
r$ [/ D8 \6 C4 K3 R; j9 gpositive for the year-do-date, including high yield.
& z9 S2 ?9 m7 ?3 c ]& Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 X9 Z R! [( q0 {" ?6 J& }; f; n7 ~finding financing.
9 R. I( w* h6 r: v, i, X" A Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 A4 a* q. Z0 A! P: E2 M5 l/ [% Uwere subsequently repriced and placed. In the fall, there will be more deals. u( N2 [9 `4 y% F6 }9 S# @4 |
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; J0 t/ D/ T$ R$ }# Y8 F7 yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( b* l+ B; d$ ^% `going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ W/ u" X6 L# y8 P1 h8 J% A
bankruptcy, they already have debt financing in place.% }+ d8 s6 D- x3 [+ h3 _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
1 h( A* C+ _9 htoday.
: i9 Q/ D& \5 e; K: P1 y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ d4 ^" y% R( ]- N z/ F$ G8 r
emerging markets have no problem with funding. |
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