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发表于 2011-9-17 13:16
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Current situation
+ `4 [% }4 Q! R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long# A, j. v( E8 p* P* h
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 K6 ? m0 T2 L t4 ]
impose liquidation values.
1 P5 Y& h. Z" D( V5 y$ m) q0 v/ {$ Q In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. \* c- M! P1 C" ?- RAugust, we said a credit shutdown was unlikely – we continue to hold that view.* J3 G' I* S9 c- G3 z+ B0 k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- d+ I+ V6 T$ f& \+ Fscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.! q+ F" G {! \/ N7 ?# [8 Q
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A look at credit markets) U" W0 k0 e/ q; I
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in) ~7 A2 l: f, M) _# m) ?7 e
September. Non-financial investment grade is the new safe haven.
2 E, G5 r" D* _7 z; b+ A High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
0 k+ M* c. L+ @1 B7 Z2 M, \' f8 ^/ Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
: l# \0 ~$ c7 n! v- ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% p3 X* `5 e; W7 b& F( q1 Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
$ M# G Z: C3 j$ K& D8 ~5 _. g0 [CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
8 l* V4 c3 g0 I% r, V" N3 [, i. }( jpositive for the year-do-date, including high yield.$ r; U5 Z: ^$ r+ [( J& W
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 C' Z7 a9 E/ A: n. h( X8 c2 r" I
finding financing.1 c/ P& U3 E; L' E+ L+ w5 ~& P0 Q
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
/ U4 [' x/ \) s' o. N( Uwere subsequently repriced and placed. In the fall, there will be more deals.
* ~' F4 u$ R5 @$ Z/ c) d Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
. _" s, m! L1 S, T+ tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) U7 h: a {1 s$ F* c
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for, _1 Y M/ ^ r8 g9 e
bankruptcy, they already have debt financing in place.( Z& o/ a+ k# e" |! M1 w2 }! i
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
; w/ M' M; l D1 ytoday., y9 H" t) [" Z. t
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
0 X8 H1 z# |4 Jemerging markets have no problem with funding. |
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