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发表于 2011-9-17 13:16
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Current situation1 } ]; Y, G, l3 Y0 h
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* w. B- ?* W# R6 Z1 g
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( x& g7 i8 Z9 B5 f E
impose liquidation values.
( u( {1 `* U7 R! \& J; E In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
1 m! W" s* S1 d1 w' R VAugust, we said a credit shutdown was unlikely – we continue to hold that view.
9 M2 O2 d; a8 Y. b: \6 [3 r9 t. o% I The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
9 m$ I3 j& P; p; @scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets8 h* W5 G/ D" J
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 Q0 j9 H- W# n# b1 g. \
September. Non-financial investment grade is the new safe haven.
5 i0 \+ i# M* l/ K. n High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 y8 ]! _! l" S' t" @8 ^( v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1; \; G3 n$ e7 ~1 B8 E* ^+ ^
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have! `* g* s& C2 k: c
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade) k0 P8 l( O( K& d! R3 G
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 n! h' n- p$ i0 w0 x1 U( i
positive for the year-do-date, including high yield.
- _& @( _+ m0 }2 e* h0 Y8 ?0 a Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
* x9 K7 T" w/ j4 Y$ pfinding financing.
. _& r* h$ M6 y- O5 o1 E/ Z Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they, o5 \% T) R# f/ Y9 l8 Q- e5 t
were subsequently repriced and placed. In the fall, there will be more deals.
" @) [, a0 m! C0 F' n Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 A: `- L7 s' e& _6 l* ^3 h& J T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
@8 f! @# {0 b: W* s! \8 agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
7 K. d6 |9 U: z, k$ h* u/ c# ]5 Mbankruptcy, they already have debt financing in place.% J6 h" I8 x# }! B
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain- b9 ^: Y& { p: J
today." I5 U4 H- e' I, [0 v
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 s6 v+ y# J$ q% \% Y6 Jemerging markets have no problem with funding. |
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