 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation, O. d( I1 j* @4 ?4 T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long7 |- j/ ^$ p3 G3 A& @1 B
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
% c1 J" ^9 |) ]* ~impose liquidation values.
% m' M( ]+ W1 [1 z9 L8 X+ P( ]' u In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
i2 F' R( A! k4 |August, we said a credit shutdown was unlikely – we continue to hold that view.
2 _$ o) r2 m! A0 v2 Q8 g The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension" G: G4 k M o, v" n! r
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.+ H# o- j, m% V$ n. Z0 ~- A
% b5 H- B$ R' U! G* W+ D/ {, ?
A look at credit markets5 }# N0 C; y7 M8 F8 ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 C4 I6 R: W2 u8 W. o$ r
September. Non-financial investment grade is the new safe haven.% q4 L, Z9 ~" S5 y7 H/ M4 m
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%9 n. N! r$ L. C4 p* K
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
3 p; Y5 P: s0 C+ N5 `* L; Q# Obillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have0 S8 { F( u, P1 _
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade {$ [' m7 P4 c6 q
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
1 I- e# ?; Q% P) F' apositive for the year-do-date, including high yield." v6 y9 v6 W, e5 m. x
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ {5 i, g6 S- [8 j5 Z+ ]1 K6 o
finding financing.& W0 w4 e. G0 z) D& S
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# A0 w' {) }$ P) h" H' B
were subsequently repriced and placed. In the fall, there will be more deals.
2 y! x3 {5 D: ^0 K Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
2 X+ r; m; y a0 nis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
7 a/ b* B; T9 ]. Ngoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
! d2 T9 K! ~& F: @' u# P4 K6 _bankruptcy, they already have debt financing in place.
) K x( D) C* M! } European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
m/ r+ K- b/ s+ _( n9 A- Q7 itoday.
( D0 P- U1 T3 S Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
4 p& }. K8 w0 [7 i ` x) s- ~emerging markets have no problem with funding. |
|