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发表于 2011-9-17 13:16
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Current situation
; X; L' s$ a) N8 O2 T; k; ~! C9 j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 u. S! O1 A" `# F Z' K. f3 f0 Qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( G: P; }' ^+ p6 G- |
impose liquidation values.+ y) K( ~* Q. U
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In5 d- u# F! y1 S- z5 i: C
August, we said a credit shutdown was unlikely – we continue to hold that view.
1 ^, E7 R1 e% z% K. g+ Z The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# z2 {9 q( A. j. x( H+ {$ r$ Sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 q0 Q& K" ]' Z
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A look at credit markets7 q4 d1 B# D3 K( B- ]
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* ~2 H) z& P i# }September. Non-financial investment grade is the new safe haven.! s# ` O' X f. O
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7% k/ y& f; n5 V6 R# n2 y4 A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% e& f9 p' ~* A! A0 ~% gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" x0 ^9 j3 R5 v Z( {' x7 ]7 k9 J1 daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
4 [$ k6 R8 ^4 T5 C8 `CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are. r' P% m0 L+ e1 G: P8 @
positive for the year-do-date, including high yield.
- {! u4 g" W$ H( E5 j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble0 [6 c, J! i8 ]- E) `( }
finding financing.
, h3 T7 i( X$ P4 J1 p. S& ]% W3 J8 y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ Q; N- G: Y4 }: s7 w% Xwere subsequently repriced and placed. In the fall, there will be more deals.
- s# v7 x# V) q3 L* l$ o: p3 [! L Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
% ?9 |2 x! Y: C. L R4 G, _9 Fis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were$ p" N6 u R8 J9 k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" ~. b( u' a& N" b7 A8 U* o* [! Q
bankruptcy, they already have debt financing in place.+ {9 O( W# M! ?5 [
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
\4 l$ v6 M: |/ |today." X, h" H3 \& r$ l" F- ~1 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, w: q& J& b- r7 [, }! R5 X8 n0 R
emerging markets have no problem with funding. |
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