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发表于 2011-9-17 13:16
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Current situation5 z, L- k: N/ ^4 v% w0 T) X, n3 z
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long$ b; y1 ~2 D: f% J# E7 c ~
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
2 H& O7 ]1 p# S4 yimpose liquidation values.8 ?9 @/ l+ K2 ^) |! e
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In9 a) T& T8 v; [4 c9 n
August, we said a credit shutdown was unlikely – we continue to hold that view.
# h4 A2 w2 m- ?: w; j3 s( w The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension0 u# D9 o- e( p' S3 r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.; M6 ^/ G1 U$ X% Z2 x" A
8 U" Y2 y! a1 ^& zA look at credit markets
! F$ R. H; L2 R4 b9 r0 [. ^ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in# e+ \0 N" p5 z5 t+ U, R
September. Non-financial investment grade is the new safe haven.4 m3 [/ U& \' ^0 R/ K1 K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 h* m3 k7 Z- C$ g; Q4 B
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 c( L+ M2 w+ A% ]7 Q$ G Sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. R1 n' P Z. T+ Y( ~* f
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
% u2 ^1 ~' x& F' N" g) v% oCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
. ?4 H. W; B' a0 Mpositive for the year-do-date, including high yield.
' m, K7 ^$ j3 j! A) B# @ Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 W) Y% }8 h+ n" K7 }) u- S- pfinding financing.
2 k( _( I* s4 e% N T2 z2 U& J Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
% h/ H4 A& M+ ], Z _) b Dwere subsequently repriced and placed. In the fall, there will be more deals.: B) Z, r4 u" S3 Q
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 Z3 P9 ?/ N0 x4 o9 J4 I: i7 yis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
9 U& n5 u7 O# [: |3 Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# w) p! i9 U, g4 s# Vbankruptcy, they already have debt financing in place.
; u& Z( ^; N/ P; i4 S+ C' i( M European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" ]9 Z+ k1 S j5 y/ g
today.) [+ o' q' Z# j8 ~- K0 h$ l7 {3 b$ d
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in, P T5 ~ ~+ ]3 x
emerging markets have no problem with funding. |
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