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发表于 2011-9-17 13:16
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Current situation) z1 _) C v9 n; v `' p6 T
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
# U2 ]! w$ U* p- ?' w3 L( Cas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
( x& l0 F: l. e/ D; s7 q* Pimpose liquidation values.2 e/ g1 K! g) z$ k/ v' l
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 C9 b `1 ~3 H$ E: [+ J3 q
August, we said a credit shutdown was unlikely – we continue to hold that view.1 Z; Y- I1 h8 F# k
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
1 T; l1 R6 L- b# D' x7 \3 C# rscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets; Y- A! ?: P# e$ \
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
) P" C1 x* \: c4 C( LSeptember. Non-financial investment grade is the new safe haven.4 {8 @. S2 H5 x0 v/ k' d7 J" `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 M6 W2 z/ P1 Q1 m' I
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! ~) H( p, M3 d- hbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have# A |& o. }$ H
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade" x3 l- f0 q3 o8 x1 A
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 ^/ Z4 C" C+ G& U: T! w$ _" ~positive for the year-do-date, including high yield.
' Z# w* l- t' v7 Y) Z! Q Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
' `# F/ N7 d$ ]* \( Ufinding financing.+ p9 |, _; o/ @
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
0 \, F1 i. h' v7 T0 I" \were subsequently repriced and placed. In the fall, there will be more deals.
# W; k6 F8 B; p4 S, O N% P Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
4 p' o* Y) l" Y4 a2 t! q3 z5 {is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were* g6 ]: T( P* P i( T( p
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
2 K; v; c% E% t6 l+ _" S" J1 abankruptcy, they already have debt financing in place.* ?- O0 B. Z9 y- {' T, u9 X4 D j
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain. x* i& T* n& d- p
today.
7 [% C, ~4 A% h& W1 ~6 |0 | Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in5 M' t. C6 G5 W; _& Q
emerging markets have no problem with funding. |
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