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发表于 2011-9-17 13:16
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Current situation: W1 n0 I8 Z ^0 m
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long: E' n$ ^/ D+ ~0 i1 H' V
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may4 {& ~& v: k) m8 v
impose liquidation values.( r* Y/ m7 K7 N4 M9 s0 [ N
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In3 b( i" m* x! ?+ e4 W% b* B
August, we said a credit shutdown was unlikely – we continue to hold that view.. @* U8 \1 k* @; _4 T( d; O7 Y; \
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
6 y* b h& K" `; M+ @# Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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A look at credit markets
; a" W! ~2 H7 y Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' {" X: }3 }) wSeptember. Non-financial investment grade is the new safe haven.
+ ? J2 R! u+ T High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%& e' F- |+ S; S
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
( _4 h7 w; }- H/ u: O4 \1 q, P, M! ~billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
% H& b+ Q# ~. S9 caccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade' B! n0 \8 v8 V# e5 o! a
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are! f( o% |% f: @3 l! N" c7 G: t
positive for the year-do-date, including high yield.8 ~9 B0 d5 J9 n+ L6 @- Q
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
4 g5 v5 ~- a& v& V7 yfinding financing.
% k) y' Q. E7 _- E. b7 U Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
9 n8 H2 w- |3 C. {2 dwere subsequently repriced and placed. In the fall, there will be more deals.
# R4 c' G0 N* u Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
" p- ]$ I6 L8 A, @is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were3 G; L; R* l5 U" X' b
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for- g. c! U8 v( Y$ y/ `
bankruptcy, they already have debt financing in place.
( r0 ^. D( c+ f8 L European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
, N$ `5 X( x/ g5 X5 D8 T2 Ptoday.
. W9 N; K* O& r3 s9 r Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# ~$ B- t! Y! W F1 h2 f4 U; ]! Uemerging markets have no problem with funding. |
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