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发表于 2011-9-17 13:16
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Current situation
! x& Y3 \6 h" Y C. j The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
5 u$ q! X3 X, L/ G$ I4 Z1 t kas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' O: P4 g% T$ y w# u3 W7 p, o8 a
impose liquidation values.
) J" d5 i8 N6 T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
# }" L7 J0 E4 ?( D9 ^6 |$ w; WAugust, we said a credit shutdown was unlikely – we continue to hold that view.7 R8 S7 ^7 T/ S
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" V7 Y& Y) L2 r& j/ R4 g
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.' i, w) b- L2 c3 P# j1 d- H' q
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A look at credit markets
4 k3 X# Q& E# ]# A. h l8 g Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in, ~) J$ m& t9 }; q
September. Non-financial investment grade is the new safe haven.
M6 q/ m) M0 N4 [ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
, I1 ?; e% `. \$ \& h4 Mthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
& F% y5 A3 _4 Z/ Y8 H, o( ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
2 |6 S, |. F4 U% s v( p' Q# Baccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: V) s# g: a! ]8 Q) b5 R
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% r% ^/ U* x H" G* {7 Fpositive for the year-do-date, including high yield.
' [# ~# k& f3 W2 }) f; |) v Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( o2 E! C% Q) @finding financing.. t$ H, P0 _+ y, r
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they X' o6 Q. c8 Y( Y$ K
were subsequently repriced and placed. In the fall, there will be more deals.7 M' N. X0 W* l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
7 s8 O% f4 R5 U+ a4 J& B' bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were O2 G) I4 a8 D, [
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" s( k) ]) A1 y0 w1 N _bankruptcy, they already have debt financing in place./ k" h9 R+ l1 ]) B- I
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
2 E( K! g8 P1 \. }today.; N8 C* h* x- [5 H
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in# [* J- f0 [$ ~; h- T! O" s
emerging markets have no problem with funding. |
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