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发表于 2011-9-17 13:16
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Current situation
; X& B% h. k* g3 |2 N3 c! y The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
& P! G) v# K% ^2 w" Las funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% M0 _) }' {/ D' a
impose liquidation values./ n) F# h0 B" q* k- A! d
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In1 j7 A3 w) L( D" p* ~
August, we said a credit shutdown was unlikely – we continue to hold that view.
+ V2 z& L, S+ q$ D The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension' y1 B3 n6 H5 ~5 E; U* i3 t; {; Q" P
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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]" j& ~2 g' W: {0 O% Z9 E0 wA look at credit markets& Q! v" u8 z( S
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in2 s4 [0 ~5 ^2 `' O) o1 [; z6 O
September. Non-financial investment grade is the new safe haven.
: O6 w/ m. O" R High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% F9 N4 N! k* t2 a% R$ l2 \$ n- l
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
- E; g, U+ L4 R" i$ z- c4 zbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
7 f. p/ |& F2 daccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
9 I7 z3 n( m/ |( V8 YCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are5 {- h0 H1 s( P- N, j" C! B# U: w2 L
positive for the year-do-date, including high yield.
* Z& X. V+ G1 P2 |# S4 S' q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( m. P Y F! Z* gfinding financing.6 R. n1 V& H5 F' `7 F
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 d* N0 c8 o% ?9 o8 Zwere subsequently repriced and placed. In the fall, there will be more deals.
. i) P/ E* [ y% {; O4 Q% j9 ] Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
3 W/ E1 ^( r. Y: h S, bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
' w1 p" y. t$ cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for( f( x. R6 c5 S" R* e# _
bankruptcy, they already have debt financing in place.9 r# j! ~* q3 z6 e1 t" h1 a
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ Q. T& |5 m6 ?9 U5 Y* atoday.2 w% `) z7 w3 E; P c
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' [5 C/ q% e5 b2 g9 L3 xemerging markets have no problem with funding. |
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