 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation. E/ ^" f9 _0 U9 |) N7 T( j
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 X+ l# `1 c# tas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
' {5 u7 D3 C: c1 m [impose liquidation values.
- y0 {/ O; p4 B. s In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In* M! D, g# d/ j ~0 m
August, we said a credit shutdown was unlikely – we continue to hold that view.
' Z; J. ?) f) a- h, N5 p0 ^9 s The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ h4 ]/ x: Y/ Z6 p) F- A
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
, b9 w5 E1 ~) x" Q3 Y6 y% d
0 z0 q" Q |! j4 m8 D7 WA look at credit markets
) i3 Z1 `5 `' q, N+ ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in! R$ e% ~7 C. n1 ]+ q# D
September. Non-financial investment grade is the new safe haven.
" H7 \8 n- C5 q+ p2 o6 C! V High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%1 G, w! }6 D2 M. S% E% [ h- U1 t
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $12 C- }9 j- d! |- `" X
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
1 N3 V. j4 R% H, q0 W7 O+ [access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ }* p' N* \ H$ H! \CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are" A: O6 F) \% a& t6 s
positive for the year-do-date, including high yield.2 P2 X& a8 P/ V. A& s
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble; J, O( R3 P3 X6 v% b6 u5 T
finding financing.
+ K) ^7 [! W. T) O1 Q8 v Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
; y2 E, k/ M3 P# c' {+ `were subsequently repriced and placed. In the fall, there will be more deals.$ q) i9 `% O5 w
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
5 @$ C3 K( s/ h! M+ \* Ais now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; e* @4 d: {9 igoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ y( F1 c# W. P" F. O8 x; N
bankruptcy, they already have debt financing in place.
' W* f3 k! ?" c+ D$ g( Y+ y# Z7 v7 n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain: m" h9 d+ x' n* V. H
today.
* [! D4 U9 \, R% h/ V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 B$ N$ R& ]9 w$ g
emerging markets have no problem with funding. |
|