 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
: O Y/ A) W9 x+ D The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 p2 X) o7 y# C6 R) O4 `
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
; Z" P! l; s0 p! ]7 |impose liquidation values.
! e$ B2 A5 y9 n( z- l/ N( P$ T In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
9 U: G" t/ b; ?9 d0 I. U, i: kAugust, we said a credit shutdown was unlikely – we continue to hold that view.0 [! b. W4 Q7 U2 r+ h2 e
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
3 y! r7 T5 ^) ]1 o: W9 [9 Cscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% n* F4 `4 O: o
' i- K. h. U6 K# a! hA look at credit markets1 C4 @2 B$ w' a" J+ ~2 }
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
6 ?5 `, C& h q% _3 q2 p9 KSeptember. Non-financial investment grade is the new safe haven.
. F6 y5 |' o& Q, O4 s High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 w4 B7 S! o% T& @
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, N/ J2 k; ^" Abillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
; s9 o4 K& i. z7 f" I( Y" Eaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* N6 u* R- t/ d7 e: l& L+ V* N# t/ O
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
2 P7 L. j a; ^$ Apositive for the year-do-date, including high yield.
) Y+ {% _! ?8 _( _/ n5 h% u& j# E Mortgages – There is no funding for new construction, but existing quality properties are having no trouble! g7 d( F& m( f; c3 ]4 X* B2 J% x
finding financing.5 a& K! X( E) }
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they/ u O% B& a) i' E( j: z1 U% o
were subsequently repriced and placed. In the fall, there will be more deals.0 {6 N! K" _- [. F6 \" ]) w3 h3 h
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and7 y% |& e" z9 V; A
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
D D% u6 U7 Z/ j* I. q( u. N; l6 agoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for0 p" M% n5 v$ N6 N7 K# I! G3 r
bankruptcy, they already have debt financing in place.7 M0 G) `$ [' s: R, v( O4 h
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
' j$ r: v& ?, L0 A1 \) }today.
" N n. }7 g) T* z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
- X: N B. e {. @+ c( E, nemerging markets have no problem with funding. |
|