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发表于 2011-9-17 13:16
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Current situation
3 V1 e- S! e( m0 A1 W The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- [$ m* u. U. j1 ~/ r4 v
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may6 X; d+ ]4 A9 ~( ^
impose liquidation values.+ H! `+ [8 S8 m( o' g# E( Z
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
! c! t- k' J, f. d B* o3 y2 H; KAugust, we said a credit shutdown was unlikely – we continue to hold that view.2 [7 D p9 X7 @5 c& i# p
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 |5 f2 g! a9 M' f0 j6 U- {( |scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 g7 p2 Z: R. ?' w4 }
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A look at credit markets
& \% Q8 g9 n: A) F Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
: z5 f+ o t1 a8 q$ TSeptember. Non-financial investment grade is the new safe haven.3 v- B7 K Y0 H2 x4 N+ f& ~+ o
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%7 n9 j. f0 R# V
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
1 m5 U5 M* l" k: h, G+ _/ rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- p$ G( g0 S! F" h4 d; T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. [7 f/ D, O. F; x- C8 H
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 ?/ j( ~4 a. T# D, Rpositive for the year-do-date, including high yield." h+ x7 m, K f8 R$ y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# n2 w/ ^" c% x: O8 N( J+ \finding financing., c3 E2 T8 t2 V" m3 Q8 Z
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they+ I) `, a. J3 [. t) |* v+ q: @' Z
were subsequently repriced and placed. In the fall, there will be more deals.( t3 |0 y4 f }: |4 s/ [
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" ~2 D( }9 J& @( g& ~4 dis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
$ H$ P" e. I) M' U( Z1 ~9 \going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 E/ ]2 J4 ~* P* z! e" B+ r: lbankruptcy, they already have debt financing in place.
+ j0 L$ t) D* `+ B- B European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
4 k- W% O, t Z% G; ]( vtoday.
7 e. B( z1 V7 |, I6 }4 b Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& f7 F( G `/ I9 R$ Y6 ?* N# E
emerging markets have no problem with funding. |
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