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发表于 2011-9-17 13:16
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Current situation/ p# H( N- N# o3 N
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) _1 ^% }- o# [& `! H' m# was funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
" H' Q, a& I" H7 c& `- N Cimpose liquidation values.
, w3 X$ u8 j- L5 e, |- C In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. I& z& S+ z/ G6 f* zAugust, we said a credit shutdown was unlikely – we continue to hold that view.* n4 H! w6 d9 P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension( R4 H; [1 n1 U% G2 S* J- L* B
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% M2 f; V% r' v* H' K' V
3 p, _: R* M# Q+ s" a: ?' uA look at credit markets
0 _6 T' `( e* u: F# ? Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
3 U% f5 h" P% ~* {8 ^September. Non-financial investment grade is the new safe haven.
6 q% n% c6 `, d7 S: I8 X* F High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 T: {' _2 S1 T2 N: D
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* c$ j# t% ^1 L$ ?. `$ wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
' J6 B* r5 R! X2 [$ T3 Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade! S1 ~, T5 u' L1 Q( N2 m
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are9 H" Q/ v. C9 O2 p& \
positive for the year-do-date, including high yield.6 X8 R) e9 n0 C2 _, y+ Y: g
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% ~* O* w3 o6 z6 K8 xfinding financing.
7 S: E9 \; V' b4 t4 I' N Q8 ^ Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 D& x/ Q# O5 Q. Uwere subsequently repriced and placed. In the fall, there will be more deals.: x. L4 O. y- ` I V
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and/ K1 _1 U& @6 _& s7 w
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were2 i1 s, ?2 N) ~, O
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for6 x! }+ G+ I( X3 V( f( r
bankruptcy, they already have debt financing in place.
: R7 \; v) `5 [5 f! D* s European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
6 Y Y2 _$ e- L6 S3 Mtoday.$ |0 W4 p& k# M/ b9 z: q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in" ], a8 M( q4 A6 Q& ~
emerging markets have no problem with funding. |
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