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发表于 2011-9-17 13:16
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Current situation
* a3 G' o3 s7 D9 ]: C+ r$ r The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long/ K, g6 f g3 \5 o9 ~! ^
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may( x# y2 X* [, W7 S0 u) U# h7 @
impose liquidation values., G0 p+ F1 Z8 {( C3 R. ~- \
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In2 Z" S [8 ~7 s2 W$ x2 T5 `1 h! w
August, we said a credit shutdown was unlikely – we continue to hold that view.4 d* k4 Q5 a$ B. Z. J
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
: g% X/ ~5 X k: e+ Uscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets, [" p' b8 h4 r$ a7 A
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in+ {' W7 p! k5 p8 g) w/ m* Z# T
September. Non-financial investment grade is the new safe haven.
' t6 ]9 \/ O0 s E# k% ~ High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
( h& W5 f. K! U! }) Y, vthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 J/ _9 q0 o$ J" S" E
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have8 v W# G: k& K
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
7 U; O* g+ s, R; [# s7 D j0 w" D2 jCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are: o" G) b& @/ f' P) \/ n
positive for the year-do-date, including high yield.
4 q+ |( C* c$ Q s Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% }$ u; \ `1 v5 A- j! \: X# x2 w
finding financing.
; U; e" J- r* \& o' r. h f" \8 u Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
6 @3 G/ h0 B1 x1 swere subsequently repriced and placed. In the fall, there will be more deals.5 w) n: P# t3 t3 W1 K w1 R
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and- r$ Q4 _, Y; D1 Z2 D# G. D4 g! T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were/ a- y {" h- h0 [2 s @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- x& ^! p) e& |7 e4 Z- _4 D8 H
bankruptcy, they already have debt financing in place., \- h$ X5 V% s% d% }+ y
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
/ h/ z- _: H) S7 x9 y# t+ i/ qtoday.
8 C% S% _1 y% ]# p1 L0 C' i Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
6 I, S" O( h, r+ ~emerging markets have no problem with funding. |
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