 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation* F4 Q# c! ] ^( X- B e% x8 u
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long9 R1 B8 e! _# f2 r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- Z& X: P8 H, Simpose liquidation values.
; F) |, H% Z3 L% c+ | In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 K% i4 ]9 N2 O$ P8 l- G
August, we said a credit shutdown was unlikely – we continue to hold that view.8 @! b+ I0 l' E3 l, t+ x9 B
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension8 Y. z% S9 n0 A6 d; n+ l
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
' Y y. o) e/ B2 t! \. c+ }. @5 _# |; W1 x4 K" x( H4 e: Q
A look at credit markets
, y" i1 w: L5 L: Y/ A) ` Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 Q4 `# d8 X# wSeptember. Non-financial investment grade is the new safe haven.
' C q$ j; E5 x! C High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%, r: {6 i: }: Q X/ t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
' M1 d a6 ?* j9 rbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have+ m: J# |( |; ~5 ~6 v5 d
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
, k! N$ u. e; j9 m t/ WCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are$ a/ I$ A; g! O# g0 E- @" G3 J
positive for the year-do-date, including high yield.
! c, |+ ?+ E! ^! Z1 f% R# ~" s1 w Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
- ?* l: q: c; y$ F- p" Y* Afinding financing.
* Q' }1 E/ H0 P; I: W% C# x8 w Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
: \4 w$ D7 q! `! z' W/ Gwere subsequently repriced and placed. In the fall, there will be more deals.& c2 p8 ?$ V8 \& Z& { f' h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 N/ @3 W! g o9 e5 Z; D2 b7 |
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
1 A! v3 A; ]9 ?- s# f" c, {; z9 s/ ygoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- y8 W2 e( G9 ]# t# z7 jbankruptcy, they already have debt financing in place.. P# ^7 o+ w7 b+ W% A4 w+ @, ]
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain) ^$ p. Y4 S% K: J4 f- ^
today.
! d/ _1 b8 R; b3 [9 j Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
5 r; S% x9 d) D; K( Memerging markets have no problem with funding. |
|