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发表于 2011-9-17 13:16
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Current situation
, U' L6 {! L' L* L: o The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
$ S$ Y+ c* O xas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may2 F# o+ G- {/ m* L' b6 a6 Z
impose liquidation values.
% ]5 G/ C& o/ I4 ]8 I" d0 J In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. c7 v2 K+ h' ?- L- B: c* B1 \August, we said a credit shutdown was unlikely – we continue to hold that view.# x3 k4 y L5 |' u7 ~- _
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension6 u9 `7 z9 \, x$ P5 k1 _
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
% L3 q* @& I" I7 a B( o, L, b" w6 C& F6 @0 `7 ]7 {1 w2 W) I
A look at credit markets
9 V) |0 H; q. y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
7 Z7 u; Q6 [1 O3 M- F A. l! \6 l9 GSeptember. Non-financial investment grade is the new safe haven.
" ~$ v$ b/ o% R# H- Z$ S High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 A" p) S* i s+ P ^& Athen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1/ Y& a/ g+ U# p( Z% o: x) g0 o7 V
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have3 y( L1 O2 G* l6 {; b2 h
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
# w4 x0 p) y/ |6 r" N4 iCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
6 S1 [2 v, a% z2 F) ypositive for the year-do-date, including high yield.
( b" O3 l( B0 c/ b+ X/ M: L Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( P" }6 C J+ rfinding financing.4 W" k, k! P( v
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
5 K8 C9 u4 F% e$ @0 Nwere subsequently repriced and placed. In the fall, there will be more deals.
7 T9 C, d9 j4 g5 l Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
0 E1 h" |' _" K/ N- G, Vis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
; y2 P! y1 M* Jgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
+ T8 ^2 T3 U" i# ^2 Rbankruptcy, they already have debt financing in place.9 s$ K4 V1 D0 Z6 X6 |
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
! d" d, l: C( G5 C" Utoday.
- L; Q1 ]$ T+ \# s" Z7 E" X Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' O" X, H( ^3 e. l/ Memerging markets have no problem with funding. |
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