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发表于 2011-9-17 13:16
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Current situation& p. [' i0 m2 i9 E# B4 G
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
2 ], B! [% E% J) ?8 \as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may& l: W' d; w7 G, A4 t- L
impose liquidation values.# V. l9 g( S1 m g4 W/ O
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) c X" X8 N' G3 {; p: t! Q, MAugust, we said a credit shutdown was unlikely – we continue to hold that view.; k3 H' _0 }- B r) ~
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension4 K5 z& i1 a2 v2 J. J( q
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.( [! J8 i# _! K( d
0 o( o* F w: b2 K( FA look at credit markets
9 N2 m1 r" Z" w. u1 H4 N% U% z Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in8 O5 T( D! M* N# C: @/ ?* j5 C6 {
September. Non-financial investment grade is the new safe haven.
3 {# c/ i V/ V4 M2 M7 J3 q High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, O5 G" z% j U$ H5 Fthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1% a& Y' ^9 L# t' m7 l& D8 n, `8 Y; F* W
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
: N2 m+ r# H1 Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade. Q. _ G2 A1 A0 C4 f) S! q- I; p
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
" {# s3 X# a1 g9 \& g/ q# Bpositive for the year-do-date, including high yield.
) z" ]" ~8 g$ q6 U- Y. W Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 T" r* ]* j9 N& }
finding financing.
& o6 f9 J. L- y Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
$ I9 O: ^* s" ?/ }) }# Hwere subsequently repriced and placed. In the fall, there will be more deals.( E" a7 h+ T8 w1 v7 S
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
! }7 X- s. `, }* r. Pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* n. |, k; W8 N1 p( e5 R1 j& rgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
/ N7 p( F, e' Zbankruptcy, they already have debt financing in place.. X' M# b9 x0 N5 j4 O8 v, P8 ^
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 M5 c" x% m+ S5 M" k' [today.9 b: R" ]! n$ }, C, d
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
7 _, G$ K- @4 uemerging markets have no problem with funding. |
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