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发表于 2011-9-17 13:16
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Current situation
( c- j( Q m3 R6 n7 l The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long0 ^6 p. {: K& u: R9 Q
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! _: ^ g0 @. \- v8 a" g" ]* C7 yimpose liquidation values.
1 K' ~0 `2 o+ }& l9 Y In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 i8 G1 J. R# V( h3 l5 ]) c) w
August, we said a credit shutdown was unlikely – we continue to hold that view.' r) n2 X* Y1 ^6 V/ A1 e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
7 p: B/ J* Y6 W$ _scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. h; O$ E( `8 \! ?
0 B, t* e- c7 B$ l+ J$ b# Q0 b X. CA look at credit markets. V. t! v7 h2 g+ t* f" `; e
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in* O; o& |3 c3 |3 P9 E
September. Non-financial investment grade is the new safe haven.5 w4 Q1 ^6 l2 l
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
* r" u# \0 q' {3 {& F+ N* pthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1& Z1 P7 ?" G S) I9 i$ W' Z( g
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! I1 c3 _3 l# \. Haccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ O5 B' b: v; ~4 t% o8 eCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 V2 e) i2 p) J4 x, ^( G1 v! A/ g4 o
positive for the year-do-date, including high yield.* G; c+ Z$ b$ i8 K5 f* _
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ N. _( _3 x1 s9 x' x" ^ a/ h3 dfinding financing.
8 a1 ~/ U# F) }! @3 S# X Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they% L" D( l' O" X
were subsequently repriced and placed. In the fall, there will be more deals.5 K' u+ F, L* s# E
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ r7 ] E, j5 a7 U ]
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were! n# V1 W! x, L0 `+ L
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for/ s- I. N+ Z" w( @/ G( K+ R6 H
bankruptcy, they already have debt financing in place.9 K% K/ B: I/ W+ S2 q; U( Z- \
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ R: G8 p% C5 e6 `+ j- N2 Y0 vtoday./ m, {1 z& p0 X/ L2 A
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 @3 i3 x* o1 I% c C! g7 p
emerging markets have no problem with funding. |
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