 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation$ \9 B4 q& z8 R U' n; O
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 z- F- N; x7 X: ^- Y
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may3 Y% S' Q' \1 Q. C6 [1 \! N
impose liquidation values.
" n1 V" ~, {- T/ I1 H) v- p# K3 k7 c In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
: e. P7 y$ @" f4 n, F1 SAugust, we said a credit shutdown was unlikely – we continue to hold that view.
5 D1 O. l* B) `5 W) d4 D. [% c9 M- r The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" n0 J( {; U9 I* n3 k) H
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
2 d5 e5 A3 |) Z- w7 t! r v0 Q) B: J& v$ S* s
A look at credit markets
v/ o- R2 K6 {5 i* s1 |! a Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
9 }7 w- E, r7 l4 V7 WSeptember. Non-financial investment grade is the new safe haven.( D. M, ^5 ^) {8 e+ a9 C# t
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%0 O) u( d! F! a# v- K' b8 f
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
# _ Z2 |$ k* v- n3 Wbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
8 k9 ~1 [: j' \5 `1 ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade: K5 S* g$ ]% s% [; j
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are k! A1 i& `, H9 L; m0 O
positive for the year-do-date, including high yield.' d; v/ l B# T2 k9 N. S+ k; I" o7 n
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
% s4 E7 W9 ], T6 t+ s4 B D) f& pfinding financing.
, O0 o9 I, a1 V! t# B Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 m& w& T/ R, |8 q% k# W, V) [; h) @2 owere subsequently repriced and placed. In the fall, there will be more deals.; {" U3 a) {7 e
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
1 R2 L' q% R' G4 e S$ n/ R/ F. wis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; @9 m. r$ ^( U1 Agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for; {1 p1 U0 e* g) p, F) [
bankruptcy, they already have debt financing in place.# P$ B+ s l9 Y& @2 e9 m8 k6 _
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" A- O8 O5 h$ ytoday.
" `% C9 D: B- i7 d! L7 g Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 S" w6 i( D+ j1 t! v+ cemerging markets have no problem with funding. |
|