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发表于 2011-9-17 13:16
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Current situation
. a- v- p% C' _- I. X1 H4 L The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
3 v+ i4 v& Z: `4 q# vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may' v" O/ l# B {
impose liquidation values.* R' B) l( ~1 o$ t
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
) i7 O; L8 t! ?7 CAugust, we said a credit shutdown was unlikely – we continue to hold that view.
& g2 I+ o/ ?2 G The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
$ n5 _. m2 R. }) a" `9 r1 M3 ^scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
4 o8 P! [+ N" n( ~4 f/ \
. q: F: C9 i6 m2 iA look at credit markets
- [% z% T0 K4 T+ s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
% W# [ i/ T8 @- V7 @September. Non-financial investment grade is the new safe haven.
) Q2 `/ x# I9 F" ?0 m7 i5 [+ c High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
4 K! _1 o- C' P2 Gthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $16 \, N' f( w0 ?
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
9 S' U2 A& Q+ V- r* q/ Oaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 o Y4 q* K6 o0 t( n/ x" dCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& ~. U6 I! O$ b1 j6 Rpositive for the year-do-date, including high yield.
1 ?3 ~$ i8 D J- }- N3 n Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
2 j; @& {: V* X6 [7 \8 Yfinding financing.
, o$ T* t& ~" w9 _- j2 H$ R1 K Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 z% G8 P" H% r; p) Zwere subsequently repriced and placed. In the fall, there will be more deals.9 k# R# Q2 S: i' M7 `/ A5 X
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
# @ W, V5 W1 ^" xis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were% j- b( j+ S6 W& r; S4 K
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# k# c6 b+ B9 n' g+ I4 Fbankruptcy, they already have debt financing in place.
6 m" b" y4 Q5 i- ?! W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 u0 _( W5 W# \% @6 z, ?5 wtoday.% e/ l/ P" m! O
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
9 a- m* l; y4 ]* Jemerging markets have no problem with funding. |
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