 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
`# o* D5 g' a8 _! h The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
; N# e2 s' J! L5 P5 Zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: b" C z% P# u( eimpose liquidation values.
) Z- c+ B' w1 | } In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% Q9 B( I" l8 b/ O* }1 M2 J0 XAugust, we said a credit shutdown was unlikely – we continue to hold that view.3 x! _ D! W5 f5 k' m. H+ X
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension C& N( N) l; b2 V2 w/ c% o
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.4 r) E- u" z& n& }
7 ]+ i- T1 b6 \$ Z! `
A look at credit markets ^' _; |! G7 {
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in. x/ b5 _1 f# y
September. Non-financial investment grade is the new safe haven.) c/ ]" X+ k. B- ~. ^8 S
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
9 p/ Y0 _, G d# B: v/ Lthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1: S4 L6 Z: p8 C* v. t& ~
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
4 ? L3 G7 r* I: Y$ Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 N6 a* r4 ^* A( z. w( r) h) GCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 `0 o5 B$ q5 X+ r, @6 R; d& W
positive for the year-do-date, including high yield.& a" i: i, f" o" o
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble' m6 w' t$ ]$ \! q! p9 ^: x3 B0 h' }
finding financing.
( G7 y2 M, F0 v1 q5 v# Z% P Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 C. F# }+ z& M9 b) l! l$ swere subsequently repriced and placed. In the fall, there will be more deals.0 i; C. e& D* r3 M5 d5 y; I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 K4 c# K6 E( i0 l. G8 o2 j& o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were6 Z4 p( D( j! G* s3 @3 T7 P
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for. T9 l- B1 S" s0 N+ g6 K- P
bankruptcy, they already have debt financing in place.5 v) L% ~1 B |1 Y' i* |
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain5 f1 `) D% `! C: O8 o
today.
; V: [7 S& F* z4 M Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
+ h6 d# S8 B6 e0 m; cemerging markets have no problem with funding. |
|