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发表于 2011-9-17 13:16
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Current situation
7 {( f p1 e; l$ G7 @+ ^ The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
* ]6 B& H* c. e ^" Pas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( u# d' y( i- |1 w$ e+ E
impose liquidation values.
! V. ]( ?+ |* ]8 \& K! S In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ A* o. C$ ?4 a1 ~' ?
August, we said a credit shutdown was unlikely – we continue to hold that view.; n; r* }. Z3 x/ p- M, S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
( T# V' H8 `) K& U1 dscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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( ^/ M2 ]$ i/ @% oA look at credit markets
1 N1 n2 Y% O& [& l# }& O! k Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
- b" y/ i, k& N. V$ c, {September. Non-financial investment grade is the new safe haven.# T/ C1 V) K. A3 d
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 W" s! {$ l% T/ X& u1 _4 {* E
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $18 w# e1 V& _, d' K- @
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
6 h! a' P* a/ zaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade- |# M) G) E+ u% g' R# q8 H5 Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 {) \( ]. ?2 N. H5 O; v3 p- m
positive for the year-do-date, including high yield.
9 H+ B0 e6 X- h% j1 N Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; l+ B4 r4 @' j! j( h
finding financing.6 d" A u) N$ _& l$ Q. g& n
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ J4 p6 b* D+ J0 F9 C7 Jwere subsequently repriced and placed. In the fall, there will be more deals.
8 S( m% K7 d5 r! k! M( B Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and+ b8 I2 ~& @* W: U/ V% y
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
) ]6 U) k! ]* m8 _; C6 xgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) X* V) M" J2 J v0 V+ G
bankruptcy, they already have debt financing in place.6 m: k/ B+ y0 ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 l4 k) u, h, |: y: O( S5 m
today.9 Q0 m0 J6 h& G/ v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in- d9 L, d; u, a4 j4 y
emerging markets have no problem with funding. |
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