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发表于 2011-9-17 13:16
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Current situation
6 e3 F+ c T2 t, v* i7 {& i The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" Q6 Q/ W3 [. D' v# D- m5 Oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 j1 o' v4 m W/ j. p
impose liquidation values.
- {- q F% @+ a; [ _ ^8 Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 g' x( w& m7 ~4 z* L* g
August, we said a credit shutdown was unlikely – we continue to hold that view.0 k5 C$ i; E7 d1 v& H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
& k( E! k/ }/ R& |7 S, jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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5 z: n. [" a: j" J* i9 ZA look at credit markets
0 V2 {' H/ {) G$ u* i2 R: ` Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! M' }4 X, s% b: ]! p
September. Non-financial investment grade is the new safe haven. P J" u- V- n4 X& L
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
/ A; M j1 }" [2 i' O' f% {then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
% r j7 L1 U2 ?( h- @billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 [' t% N9 t/ E4 w. d; V2 }) Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# x3 N4 q9 j' f
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# q% q O- W* D3 |3 o
positive for the year-do-date, including high yield. \' N2 t! R+ I
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble7 }; Y( e8 s6 L* n" O8 T$ X. ?- @0 m
finding financing.0 k( F& D h3 o+ ]6 Z. O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they' d# m4 m$ L$ T0 v0 u2 G# u- s
were subsequently repriced and placed. In the fall, there will be more deals.
/ Q$ ?1 `0 I) v Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ T5 W1 I) V2 T/ r
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were# B2 W! W9 N, R; m9 F
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 ?1 }& z' Q, i3 G$ J" B( K) U# d4 Ibankruptcy, they already have debt financing in place., x9 f( T }, [5 X6 }
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain2 g1 \/ F/ R, z( H) {3 h$ M6 Z: `
today.
0 B3 l6 E5 h4 K* G/ y Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 x( I) } y3 N2 R0 ^- b+ z- ?" iemerging markets have no problem with funding. |
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