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发表于 2011-9-17 13:16
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Current situation
v5 j0 B9 g0 x7 Q& ?2 x The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
/ F/ t2 I' W( j6 s. e7 Y$ @as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& T% Y- t' y+ m D
impose liquidation values.
& a. s S7 s4 \$ |4 _" { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: w( F( X. j8 H- V' ~( EAugust, we said a credit shutdown was unlikely – we continue to hold that view.& Y9 L5 H, v4 S, l) m
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! r7 ~3 j; o1 O- q1 e# vscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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8 X/ i- I6 U2 c# M# |: r- j2 z, B4 o: R" XA look at credit markets6 H/ m; G5 r" w9 K" }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 F7 k& k, p3 d. y
September. Non-financial investment grade is the new safe haven.
& F& a) p" e- i0 n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 p/ Q( ^" S2 G+ ^
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( a# [" t' D0 \/ Y* i* sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ L2 t0 a1 u4 T8 v) g' X8 Q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
' y& \8 R! y# s8 |- i' VCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are# |1 `8 r6 v9 `& c2 n* h$ |
positive for the year-do-date, including high yield.
8 C, Y. O0 E8 D' e5 w+ t Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ W9 @5 S9 o5 [2 M, Bfinding financing.
% e' e: Y5 c' P; Y! A* b7 e8 s8 t3 L Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they9 L6 R# j3 ^2 _9 T! D7 W& W
were subsequently repriced and placed. In the fall, there will be more deals.9 B9 T0 B5 A$ }& J
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& s1 c7 E* J3 g8 Y0 Tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were9 z& w4 A, y& M
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 T! f2 B8 `9 ?2 _& H6 e( G
bankruptcy, they already have debt financing in place.9 |9 t1 N5 F7 P
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
) d2 b4 Q) R- p$ ?. u& x6 T$ ptoday. ?0 \4 J4 X$ ~2 M* g2 E% I2 u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in$ g6 Y% \ ]. w1 D& ?; T8 a
emerging markets have no problem with funding. |
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