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发表于 2011-9-17 13:16
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Current situation
8 h+ O/ c- K* J* l The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; F4 b( p; i1 ]5 b' m0 u& r# has funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
1 @8 m% T7 n4 c9 q, v) L* himpose liquidation values.
* a1 n/ K& ?% m In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In7 T: }# C$ e2 w" H
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 K9 u5 a* S2 o* R( N+ O The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension ~2 s! L0 R. X' r5 P7 m
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.5 Q9 Z! f. U- Q( @' `
, c c! Z: m% r$ LA look at credit markets
& v4 }) H' b# e" q( ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in( u% D, o6 X- O% z, W! `9 n. j( V# p
September. Non-financial investment grade is the new safe haven.
3 @' g. u' b: ?' E High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 K4 h/ z2 g/ d, U7 F- x2 Ithen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; ~( Q9 e* [# q1 P, S
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 p1 q0 e5 k9 F% H4 U- z* gaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade2 p) T3 @7 q4 N8 ` ~6 `
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 o& e5 z+ z/ `/ x) Dpositive for the year-do-date, including high yield./ U; t- [8 j/ [+ g5 I( P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble8 a' _' h1 p7 q. `- l) h) ?
finding financing.0 O( M/ ]: e& j- X. A
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they& Z' q0 D2 c' x/ i9 x; G! a
were subsequently repriced and placed. In the fall, there will be more deals.
+ V& Q$ Y' f+ Q Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and; r, h0 x5 D6 j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were+ t6 h( \$ V& x$ j! P
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) e; E$ s+ x$ Q" _9 Y" N0 v
bankruptcy, they already have debt financing in place.
% I4 l* s% d- O' u" z" F- b European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain, c7 w0 l. s& Z, S+ @! Z" Z4 i
today.
1 a3 @& H6 Y$ a Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in! B( }, P/ z9 F/ b! G) @
emerging markets have no problem with funding. |
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