 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation" O4 z1 I( l, W$ E; a. W" X: _8 ^
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 W4 `( x3 d# r+ ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
# S, ~ u# o! J1 o0 t6 Eimpose liquidation values.
8 Z( H' g1 A r% p8 | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
3 R$ K, z" I% j8 g2 u, DAugust, we said a credit shutdown was unlikely – we continue to hold that view.4 g6 T0 @% ^7 T k3 a% ], R
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension2 b) `1 Y9 p6 {5 ~$ W
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
, B9 e, Z- L# U2 c$ E
. h ~- A: F% a6 x" H7 @1 {A look at credit markets. W5 i( d2 O1 v; ]4 [. {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in6 c# H# H: y# K0 B0 C( v! k* j4 j
September. Non-financial investment grade is the new safe haven.
2 O! \! C# E7 V High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%/ e" {1 C! P9 Q4 Q$ D6 G& K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
4 x) H1 l/ A5 s% J1 d- j* obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have/ J; [9 p( _, A/ P; c( l# T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* n; G6 D, ^5 Y8 [( U, y
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 b( @8 y* F# N8 v* Epositive for the year-do-date, including high yield.* e5 e, F2 u( P- ?
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ v% S2 Q# U8 c& nfinding financing.
) e; K1 O8 w, t9 Y/ \6 t Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
2 R' b# V( O/ Y7 ywere subsequently repriced and placed. In the fall, there will be more deals.
, a0 }5 b% A3 A6 o1 [; O6 _ Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
/ P" d" \ l1 _& l2 `; Zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' s4 R ]: `8 I2 T H7 R0 egoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- V8 H+ Y% ~: U# N; Rbankruptcy, they already have debt financing in place.7 U7 Z# q. @4 v; G H" M- S# d
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 ]* x. g& i. i- x" Utoday.' B7 s5 T. u" Q: T/ G0 H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! c t7 W- y0 B, p4 b! remerging markets have no problem with funding. |
|