 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
- s# ?5 [' o6 U2 B2 ] The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
6 |# ~) H, b7 d2 |5 ?, g/ J {as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
6 C/ X0 T+ T0 r& p5 }) Limpose liquidation values.# S1 u, `3 o8 v
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In' v( X: r/ U2 P7 f) h1 W
August, we said a credit shutdown was unlikely – we continue to hold that view.
, N4 K; b& E: d; K' ]! L The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ M) V2 ~ L6 K M ]scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
/ U! j$ x2 e/ d% e5 d) f5 L. B# F' m: N3 K4 u: q5 g0 r
A look at credit markets/ G2 A$ x9 o" ]+ ^6 }! f: A5 V7 X4 _
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
. y- ?3 F* l' a/ j. ~$ |# hSeptember. Non-financial investment grade is the new safe haven.
! t. K2 K5 O! S! h: a7 E6 H High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
' I4 V, W* h. g4 n6 |( v% \: V2 Rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1) O; D+ t4 q1 i4 D0 B! [
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have$ w; J$ H, C1 \5 K# ^
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade# u2 ~" N% n+ n. x; p3 D
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
% M4 v; q' H7 |7 Ypositive for the year-do-date, including high yield.7 K0 y/ T6 e8 w/ t8 w; ~
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble/ ~4 K8 @1 R& L" J# p F
finding financing.7 \0 G$ ~9 _: q [7 v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
1 |" v: b& D, c/ Iwere subsequently repriced and placed. In the fall, there will be more deals.) x$ r0 W$ J/ V7 D$ M5 l
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
; \ M, u8 e! h7 O) E; v, pis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: l: j1 L# P; qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for8 D! B4 L* k+ A; h
bankruptcy, they already have debt financing in place.
8 Z7 H) }. U& Y' i% n1 a European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
# l5 a5 M W( m( xtoday.7 b8 a Y% q( e5 H' G
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# o/ f* e& E6 d/ ~emerging markets have no problem with funding. |
|