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发表于 2011-9-17 13:16
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Current situation
# {$ @1 }, h I) Q, |* q/ w1 M7 h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 w$ A" P9 X* g9 Ias funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: w$ ?( u D2 O Rimpose liquidation values.
& w4 u! W# r1 L1 L$ v6 k% i In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 z0 P n( x) ?& c) Q- q+ Z/ U3 m
August, we said a credit shutdown was unlikely – we continue to hold that view.
5 ^6 o7 s5 ]; n9 a6 U' v' _ The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 ^- n- W p+ A& o: w/ H* _( m, O& f* hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.6 g) b- g% S+ D1 w7 U+ l9 G
7 `! Y0 u! X" rA look at credit markets
( f& n% n, I& i$ P( J8 t" K* d6 ~ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
( j) ~9 x2 A2 dSeptember. Non-financial investment grade is the new safe haven.
) A6 x0 r" X& A9 V4 \- u$ f0 P High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 W5 g' f. o* Y; a4 f7 e# P- Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& |$ B4 R* r, h8 U; t( j/ v2 Xbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
) }# a9 [6 Q& J% @3 e4 h5 Y% waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% `4 g+ ?6 @) S+ y: A; e
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
$ O& P/ U) S Y! N7 cpositive for the year-do-date, including high yield.
1 x5 f( q) `- P% D Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ B( K: j$ p8 y, C; afinding financing.
3 ]' Q+ E' l9 q& u7 h Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 L6 m( o2 ]" m* |0 G1 ]! hwere subsequently repriced and placed. In the fall, there will be more deals.. g+ P/ `/ W: x% g
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- j6 r& g- K: h7 Sis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
! W3 i. c. H0 G/ b0 A! _going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( F- y E7 W y. ^ mbankruptcy, they already have debt financing in place.4 @4 h; d* O' G; n
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
+ e7 {# b1 S" v6 Gtoday.
7 ~: [: e" V, p6 Y; p Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in( v6 `& u w# F- S6 T
emerging markets have no problem with funding. |
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