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发表于 2011-9-17 13:16
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Current situation
+ `$ y; _# G' T+ p: W3 V. Z- b7 ~9 ? The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
: F! ]0 U" z7 Y- M: G) oas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may7 C' S, A2 y) ?2 ^& j9 T
impose liquidation values.% {/ Q9 a8 ?! E2 a4 U" c
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) ^" x, v2 i6 k4 N* \August, we said a credit shutdown was unlikely – we continue to hold that view.
5 I* j, g! A& w3 f* F+ f The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension: b+ x6 @- V0 r8 u
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
1 u$ a0 _. ~# b7 H+ c9 h# @( c Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in; P0 ~# u0 O: n: l3 q# R0 H6 s1 L
September. Non-financial investment grade is the new safe haven.
0 s, s( y( X0 k3 { High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
) l: _$ }2 c2 l/ @then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
" G0 F+ g' S! u# s1 B8 ~# p" M! \/ Gbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
. \3 _8 {/ S) }" Laccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 E$ K6 W4 \& E' Y; {# Q+ d: wCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! Y/ m" `8 V, T) }- g( c# q
positive for the year-do-date, including high yield./ n$ ~" @8 |4 D7 ?) p5 X6 c
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble5 W5 J$ j3 K0 J) ^% v
finding financing.! d3 }) q/ h8 X9 _( a5 H K
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they1 b1 `2 S. d/ x# ?* y6 Q
were subsequently repriced and placed. In the fall, there will be more deals.( f3 d* F3 p; Q) r8 ^2 ?& Y0 G
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and1 y4 d' {! a% e& z
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
: `% r6 v7 `6 x6 _' a3 A, ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
; e& `% c2 |$ _" z1 \6 h; jbankruptcy, they already have debt financing in place.# s1 D+ w' I. Z& A
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain7 @9 p2 r, I b: S
today.8 M/ f) w: M o
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 \1 ~: j6 `' P* J1 p
emerging markets have no problem with funding. |
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