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发表于 2011-9-17 13:16
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Current situation
: R! @/ v) X* l* G! Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long& a1 s4 M$ a2 [
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: [) [4 q7 }% l
impose liquidation values.0 f" E2 q2 d* k" P7 T1 ~4 A/ K b
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( O0 o K2 \4 S! f
August, we said a credit shutdown was unlikely – we continue to hold that view.1 f, z2 i, D6 T: H
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension* S2 n7 r3 E# \
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
w; ]5 x4 T7 }+ Y8 G& Q& \2 n6 C6 {2 V( q1 n
A look at credit markets# e% w% l: z. G; H! R5 h
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# K! j* i/ @% l/ c5 OSeptember. Non-financial investment grade is the new safe haven.
0 @+ Z/ w$ J( T6 c( c7 P High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
+ Q' ? B' m$ w1 }2 g" Zthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; Q7 H4 d$ m4 A; O5 M" T$ @6 f% q! u* y
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
3 R5 ?/ [5 }" v$ y4 O/ _access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- H" y$ _* R# a0 n8 h" N; y9 K! W
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 s$ u- i3 p5 Z+ w+ }* }' _
positive for the year-do-date, including high yield.& k( c! ?( x9 X4 S {/ Y0 }0 z
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble h+ B$ L# u$ N# h T$ b
finding financing.- O- J! j. f( Q% E6 D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 t4 C+ v6 ]5 J6 A1 E- ?* fwere subsequently repriced and placed. In the fall, there will be more deals.3 Z0 F! ], R* c& W3 F3 q5 ~; W2 p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& j0 |$ m5 m9 B( W; s3 v3 ~0 Mis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) N* z. p5 r( ] i7 j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for% M7 H5 h4 X+ U' ?$ c" g! V
bankruptcy, they already have debt financing in place.- E4 _8 }4 N+ z) g
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 K# }& v0 H0 x! }
today.3 l$ }+ s' n9 W2 t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in/ c' S4 D( Q9 V x( R, g X
emerging markets have no problem with funding. |
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