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发表于 2011-9-17 13:16
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Current situation
$ I3 G! u# ]1 B' G, Y! r+ D The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 I7 A7 n3 p, b @% T: F6 Fas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
0 B6 P' s# x% n. X* s! Gimpose liquidation values.% Y0 h, r5 c. T* |) d( R! i
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In. _; n" y4 K" h
August, we said a credit shutdown was unlikely – we continue to hold that view.
( ^4 t C6 Y' g: o9 A# E The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 S' M5 m4 D$ N- T6 J+ M$ e& }6 fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets./ O( m6 {9 n* X5 N/ x8 c2 q
* o2 e7 M9 P; F; |$ m5 e
A look at credit markets J& b5 p- u" q/ H1 h4 `* J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% G. R' w# Y) h2 hSeptember. Non-financial investment grade is the new safe haven.
! F/ X0 z' x* E$ F7 o High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%2 A1 T7 Y2 H. V, |# e# C
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 Z M5 S Z3 Q6 I! y! b( Q
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ I( O3 W: q+ |! u* }
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade; [2 j6 N# j# Z4 ?! x
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& z3 B$ r5 Q4 npositive for the year-do-date, including high yield.
) k. v, F6 g' P$ s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
3 u: e& ~* {+ O' ]finding financing.
" J2 p( O2 o( Y C' C+ T Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ R$ D) b4 I$ ?5 xwere subsequently repriced and placed. In the fall, there will be more deals.
; P- J P8 [% [# ?0 P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ [: r9 C, T( c8 l% I4 c; x4 j
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were. s S$ O4 V O" u) v! K G+ a( S# B
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 A7 }! M8 x9 k$ S3 e; D! Qbankruptcy, they already have debt financing in place.% E! r$ s, t* h2 D/ C
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain! e- Y5 E+ Q; G" G3 `
today.- t, O8 K' w2 Y7 n+ _; s8 V
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, w* C1 k* Y& U( Q7 F/ S# u' V
emerging markets have no problem with funding. |
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