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发表于 2011-9-17 13:16
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Current situation
1 g4 ~5 T5 M6 ]! J/ l; C7 ?7 ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 K( l( H- {2 M# ^* v7 A( _" U
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may" V- a4 v/ [# r; P0 G5 Q
impose liquidation values.& c t) {- }$ h) X P, }7 s
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
- C3 y: _1 K# z% s' @' VAugust, we said a credit shutdown was unlikely – we continue to hold that view.* X1 _' V# A1 y: S f& [5 [2 l- S- q
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! {3 u; E& {0 z! u9 \' `scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.0 D; Y1 G# e4 f$ S
+ d4 ^0 u5 S( _+ F% O+ vA look at credit markets# z2 D6 p3 A5 Z' i1 V0 }: @
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. |. L* q$ n8 a7 s" P, C
September. Non-financial investment grade is the new safe haven.+ c0 ~7 Q+ J6 X4 D
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%; @0 O: l3 P9 a/ y! n$ U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( e( r1 r2 N" k# _1 g7 F" Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have) ?! F, c) _- n9 {% Q. `
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 V, t7 I0 _( Z. h, r) U
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
9 G# \8 l4 h( J4 y' q7 w$ r9 g( hpositive for the year-do-date, including high yield.$ u$ k) Q# _. u! ~6 T C# F
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble- u8 k- S" }) {& I5 N8 Z, L/ m# ~8 a
finding financing.4 X8 @- f( i5 O% h8 }7 c; g7 O
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' r; v' F1 G8 [, Q: E2 D' |! L3 hwere subsequently repriced and placed. In the fall, there will be more deals.2 Q% Y n4 l7 L T( x U
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. t& h9 M; |0 A4 R9 f* C1 d* his now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 b) i R& |( p9 K* ogoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
' m* Y; r8 j6 O9 N+ b( Z- s- {bankruptcy, they already have debt financing in place.
0 H5 ~& z3 T( m3 s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain6 R% `9 Y/ {0 f0 U% \* t5 {
today.
+ ]' t' `9 Y1 x( N Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
) w4 W5 v7 v2 Q/ o# yemerging markets have no problem with funding. |
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