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发表于 2011-9-17 13:16
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Current situation
% T3 H d. n# Z1 q! D: O* K The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: h- Q& u+ |4 D8 f( T1 _2 I3 Uas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may* K6 Z% k) R/ a+ j
impose liquidation values.
/ {! _; u" i8 |8 E$ D In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
+ K) F+ w8 q x! N! lAugust, we said a credit shutdown was unlikely – we continue to hold that view.
9 _# [3 ^8 _3 \$ R7 ^% H3 F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension9 z. a* H0 }7 ?' f {5 A9 R
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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% _. j' e/ p7 G- F, VA look at credit markets
# O3 z U1 n- d. S5 w4 Z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) [7 s& Z1 i. Z" Z6 [& iSeptember. Non-financial investment grade is the new safe haven.
- W4 @* a& Q" K) L X( d0 i High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 z# s& q4 w7 a
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
2 j: a( o: B4 G fbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have( T4 U9 k5 l8 D& X* k8 G6 F3 \; M
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' f) @0 u: A- j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
/ d' [1 e6 |5 H& O0 Ipositive for the year-do-date, including high yield.
5 X) E0 @3 p0 r2 k7 `* {( T Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' z: o0 r5 j& I t% d, p- b
finding financing.; i0 X; f3 o+ ?/ s" y1 X
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 b) T" g6 B7 o+ S [
were subsequently repriced and placed. In the fall, there will be more deals." ]' F; }0 M( q) c) C& r. H
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
& N: Q1 O* F! Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% m7 a' A- X/ Y
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# R$ K. Y2 K" |bankruptcy, they already have debt financing in place., z- X5 B J8 H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: y0 j: v2 J: ]. `
today.
" g4 P# `; Y" ]# D! D8 U Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' q1 m; v* c- Z' T& ^emerging markets have no problem with funding. |
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