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发表于 2011-9-17 13:16
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Current situation5 \# h- d5 ~' @( P; _1 P: f9 S+ b
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 |! M! H/ [* b/ v. w5 V- a
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
. k2 u; e/ }1 h% zimpose liquidation values./ L) o% l. y+ K, t
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In; w( A$ K s. ~8 r* G
August, we said a credit shutdown was unlikely – we continue to hold that view.
, q* j- T1 v% r, F8 } The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
- Y; w7 x3 u: S& ~0 jscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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; A! Q! Z, a4 V! d8 z6 rA look at credit markets
( ^6 @ J6 u8 ~: I& \5 S Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) h' w4 R: G9 j* T+ w- J( r8 VSeptember. Non-financial investment grade is the new safe haven.0 W# Y# u$ f) F0 j' \* s' \. ~
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%! S% x* Z. X$ Z+ `& ^- [( A
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' f h0 G \/ `: y) h1 Zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 w$ p: W/ `- h5 Caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) C, T V6 s4 u' L( R; l. ~, i
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
! ]- W5 n% l+ [8 C( I) zpositive for the year-do-date, including high yield.4 C c+ |, P6 u% H% E: f
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble6 X7 E r- i6 A/ z, o/ W6 z |
finding financing.* s, _: c! z) j( J; g, F4 W
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they( ]5 c3 \9 ^' l, r
were subsequently repriced and placed. In the fall, there will be more deals.! n# T9 T3 C3 N& ?
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 `2 P F- R3 zis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 Y9 ~0 f, t f! I6 g; v0 ]) J0 Zgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 Y: E8 F9 B6 P. g8 m9 U8 Fbankruptcy, they already have debt financing in place.. K3 e2 e% \; c0 ?& p$ o
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain0 S, }1 h: e) @( x* M$ u
today.
, |; S$ @" S/ Q Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
! s7 A4 S, ?2 m% femerging markets have no problem with funding. |
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