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发表于 2011-9-17 13:16
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Current situation
7 w. K {2 _, f- s) T3 X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 z' @1 k+ ?, @2 Z+ ~ qas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
4 p" c4 M, @2 z9 ^, J2 Z# ^' Zimpose liquidation values.5 K7 e5 Q6 f$ ?* K' k: R
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 d- ~# Y! X) S
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ G' N$ M) ^: q" V The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
. s* \1 y* _: B/ k( K2 N8 Wscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.1 F! a5 y, _* b9 P
# I5 U, W$ k5 ^4 hA look at credit markets
: y7 [) t8 K0 L- [! _/ }: @ Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in- e# ?1 n! P( }( ?
September. Non-financial investment grade is the new safe haven.
" |, j- }1 A8 z4 R2 z, ^- L+ [8 X High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%) ]! _# F. e7 y2 q
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( G1 Z) q0 O9 g* U; ebillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have% a g3 Y+ F5 ~; U
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# A! c, `" B/ ?3 d+ VCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
0 g% H) d+ o9 I/ E0 jpositive for the year-do-date, including high yield.
$ S$ l, ~* l7 a" l* G Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
1 I: [0 H3 T) g5 Xfinding financing.
7 t: d! N+ ?- G) X$ R7 y, O h4 P Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ e9 O$ N t* r2 Ewere subsequently repriced and placed. In the fall, there will be more deals.
1 d: y: y/ U# O( S Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" G0 @$ n2 P/ ]1 j; A* G$ L" Z9 lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were& x* P( d }( z6 Z/ E
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) f2 ?5 U( L8 B/ k5 _$ l8 r
bankruptcy, they already have debt financing in place.- ?6 M: F$ z3 F2 d! e0 |3 ^' k
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 }; c5 J0 V1 h B, Z& {, Ytoday.
- u/ L) m% f. g Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in y7 b! J; H0 J6 h
emerging markets have no problem with funding. |
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