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发表于 2011-9-17 13:16
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Current situation
3 R* E) m( h5 [2 q% w, u6 s v The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long" h* P+ v+ e3 @% d! G- ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
9 ~; y" ^' {5 x9 n! `5 c9 Timpose liquidation values.+ v' s: \2 x# Q/ {
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 w2 u* V. {% E+ |August, we said a credit shutdown was unlikely – we continue to hold that view.6 E7 W) g; W3 r# ~' x2 d1 M) n6 h0 V
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
; `$ k+ b1 h0 X: s& D, i) p$ x1 P' Gscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% n7 o; |4 x( y
& D- O# Q. ?/ v3 }4 e; y
A look at credit markets
1 H. v( i& V2 H9 T( w Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
! O. g" o' l( z$ @September. Non-financial investment grade is the new safe haven.
! `. t+ V8 Q9 h m0 g2 Z- S* n, d* O ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! U0 A8 H; _, R4 a
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
0 l/ B* \6 w. A- `0 Lbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" P4 M/ n' \ S" ], Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade& t. E( }0 j8 O# w
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" e- q1 [; Z; B, [2 @7 j$ @positive for the year-do-date, including high yield.. H H! e- ~7 ^6 g* R
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# h' ?, s) m* }* V' R1 z6 bfinding financing.( j2 V+ c- r( H. ], b( x2 L# H
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
' T5 M8 G% B: l; z3 Hwere subsequently repriced and placed. In the fall, there will be more deals.) i$ J, c1 g8 d h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
: @7 E( w1 x- d ?1 ? tis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* f. E) b2 J5 f3 n& \( fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
. l7 Q3 t: W( J7 u: tbankruptcy, they already have debt financing in place.
9 u8 B3 @* c" i: c# { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) l0 C4 r" i% a4 ?1 g% b
today.2 ?3 O3 s7 y, w. p8 _. {: Q& e6 _
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# ~0 Z$ U, A3 M- V
emerging markets have no problem with funding. |
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