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发表于 2011-9-17 13:16
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Current situation
* A1 X# u1 `) W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
( c& t* \% D+ kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: b' j( b0 A9 G) nimpose liquidation values.
( d' }/ g( |- O! { In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
g8 G. \' N7 x* c" n. ^August, we said a credit shutdown was unlikely – we continue to hold that view.
! }1 p2 b- b# M The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 H! u" d6 C( I9 p
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.) S# p0 w# A# F) t$ D" N7 s) d/ ]6 {
6 }$ b/ p2 B6 B. e/ m
A look at credit markets! r }* E; a0 ]7 k
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
# w" i+ p8 X- b9 {September. Non-financial investment grade is the new safe haven.
" c/ [ ]& f8 C9 {$ X* ^, g+ _ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% f4 T+ l5 y8 m5 l7 `* }
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $11 `) | g3 n; @$ q" s( p
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) @6 w0 X) U# r5 O; Yaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
. o: h, ~+ Q/ k5 M' M& [2 ~CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
- c l- Z; k- Wpositive for the year-do-date, including high yield.6 o9 s* n' X& ~+ m% w" p
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble* p! D7 M* j, ^) X4 G4 k
finding financing.6 Z. s) @: b) Y( d
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they2 P( l- U* C- h" l! Y# i5 p
were subsequently repriced and placed. In the fall, there will be more deals.2 A+ } x: n0 V2 j4 I. A( \5 p
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
' V7 ~' q& _; ?# [6 O3 e) Dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 S: [4 @1 u( b2 g! F! Y5 O0 }going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
1 Q+ T' i1 Q b( M. j# fbankruptcy, they already have debt financing in place.
2 M2 ~3 N; c; M8 `. X6 H European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, B8 W# E& W0 Q+ Q. W: P" Stoday.
8 y' J0 x! N" P O Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in. F8 |0 D$ h( ^# N: J" o8 i
emerging markets have no problem with funding. |
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