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发表于 2011-9-17 13:16
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Current situation
5 X" L: B$ E! l5 K3 g5 z# |4 g The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long) \8 O- ?+ t% A: \$ g) A2 {6 m4 N# @' Y( _
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 i1 w: @9 c& j" {# Cimpose liquidation values.
0 c( W. S3 y% _" T* N5 F/ a In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
5 P5 m2 o& e8 d3 Z) qAugust, we said a credit shutdown was unlikely – we continue to hold that view.
% `, a" x/ K F# v The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 E3 ]) @) X' V& M4 r2 R( N: z$ Z3 ]
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
. w$ e' o: Y2 L8 x$ `' G8 d8 F( E" C: ]9 j# ]
A look at credit markets
# y- V; W* z- t: X Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 |1 F+ h+ b4 ]2 {: D, b- r3 ?
September. Non-financial investment grade is the new safe haven.2 @! C6 r9 I$ ^2 ^9 h, S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%* Y/ L/ n6 Q, M c
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 i& W' N/ H6 @4 @5 {
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 T1 ?, s$ {0 v# G( h% p/ [& [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade( W. X2 b# O) T! q! l4 R2 t
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 @8 K. b+ f; L/ d/ o( [- W7 Spositive for the year-do-date, including high yield.( @8 }. k& l/ Z& q. k
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! [+ Y+ ?- L% e7 _
finding financing.5 e) k5 [6 t" q0 q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
7 ?' x; i6 T1 g1 lwere subsequently repriced and placed. In the fall, there will be more deals.: u9 p+ L' O1 L5 d) b
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
* s5 Z. P a$ r3 Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( s' H" N5 L. @3 Y9 X7 c7 }- kgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
* _; k5 o q( r, J5 Ebankruptcy, they already have debt financing in place.
5 d! A+ ^; ~0 Y. f. W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& m1 m4 C+ F6 u7 s
today.
! g4 C! J4 B7 o, D Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& N8 N% g9 c U l- ?) D2 [
emerging markets have no problem with funding. |
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