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发表于 2011-9-17 13:16
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Current situation
5 \1 R+ N& d0 [. P/ a The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
y+ Y8 g \2 N$ A( v) }as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
- g1 w: u$ ]! e8 |2 ~. Wimpose liquidation values.
4 A7 R5 B8 g! a5 W' `$ A In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
7 z' j$ G0 P3 @0 ~1 P0 E( C( Q* j4 rAugust, we said a credit shutdown was unlikely – we continue to hold that view.
! q/ I: Z" T ]5 G# n+ T The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 s+ d1 m+ _& \( G( }scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- g; I7 ^/ r- F$ C+ e y* R
- ~( c$ A& h% Y) G, u; `
A look at credit markets
- V) o; K* H8 q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
0 F8 m- E$ w( FSeptember. Non-financial investment grade is the new safe haven.) a* e. I/ ^2 x% a6 I7 x5 D7 x
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 X$ [2 w$ i# b+ l1 M: {) S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1. d" y) g$ s# @' p! V% J
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have1 b: ^2 D1 S. f' d- @# C' T
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. O) s$ l# X7 y7 A0 \9 Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are( S9 n" q. N1 x; ^
positive for the year-do-date, including high yield.+ q( Q( F: S" T2 E7 S- v4 P
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
/ t8 [$ a3 L, ]2 U0 \& |/ i$ _finding financing.$ `4 G* S' K0 c! |) X/ \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they: q0 j+ o. X7 R* C) h1 L" |, f
were subsequently repriced and placed. In the fall, there will be more deals.1 m; O& T, m( J& [7 ^4 ^$ M
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and, Q" P# x$ ^' k1 I R
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were W+ w2 Y4 P' X! |
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
$ l) C- D; T/ Tbankruptcy, they already have debt financing in place." G3 D9 O: o8 ^: o9 v' w
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain& [' s/ [* n1 e! F$ S
today.3 [& u3 E7 W+ L' c+ N
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in+ P3 j7 O" _/ |/ q8 z( S: v) j; _2 U
emerging markets have no problem with funding. |
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