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发表于 2011-9-17 13:16
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Current situation
0 w) I+ U) h3 P0 d" p( T3 } The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 U' G6 H4 [! zas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; [' C% ?0 H. n( K
impose liquidation values.3 |7 l/ N) r0 l% d3 u
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% ~4 F8 T& a1 VAugust, we said a credit shutdown was unlikely – we continue to hold that view.
5 `: f2 |& Y! o1 Q1 S) G; U The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! t6 _+ \6 U/ x0 g s! u; J! Y9 {scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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% I+ w# u2 @1 _+ i3 m+ s9 rA look at credit markets
5 ^2 Q1 u! A2 K n; a' }# n" f Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
1 E6 j+ n# G. p* @, ySeptember. Non-financial investment grade is the new safe haven.- @6 I/ }0 Y! |. @' |; I2 I/ F
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
1 V, _5 L7 x" n, V4 U9 `$ }+ R3 w4 Kthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) S; \8 x% f" S& S3 s7 ubillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 U) _# X L* [$ A* I& [7 qaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
5 l6 u5 D* p1 {' D8 r3 N8 s1 N$ q( DCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are- s7 Y) N) L1 R" X# M! |" D3 f
positive for the year-do-date, including high yield./ A3 z0 j; t4 g) [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble4 W8 |9 A( ]# t( D: i
finding financing.0 |' a" n6 t8 u7 B S1 g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they" _! U/ I. _: s; S; T/ K
were subsequently repriced and placed. In the fall, there will be more deals.: V7 J4 [" ^$ n2 I9 E6 i {
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and3 q2 A/ y# x: a9 k4 V5 h
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were) B, e* ?% R# G
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
( u/ i) _2 y- b- t9 hbankruptcy, they already have debt financing in place.
C0 s1 u# q3 M j' \+ a5 T& v1 n European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
& Y0 }7 A/ `1 d4 b1 x1 {3 ktoday.
3 c& c! n$ I6 o. |' ?# D. m2 z# o- Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in |; G1 x6 M9 S' O; r4 }0 B
emerging markets have no problem with funding. |
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