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发表于 2011-9-17 13:16
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Current situation
G6 r* A$ j2 E* X" Q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long* O$ B! j: L6 Y* z
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may5 ~0 n- X0 K9 E
impose liquidation values.( Z# G0 p* U/ I
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
; ~# T! b- t4 ~August, we said a credit shutdown was unlikely – we continue to hold that view.
+ v- U+ }/ X' R; t+ {: b6 Q" y The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
4 S0 z% l4 ^% {/ Bscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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" ~) z3 g6 W. ~* z3 g. m- dA look at credit markets
- _ W& M5 q0 q. G Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in Q) q9 t$ @; G4 l3 r
September. Non-financial investment grade is the new safe haven.5 G; V8 R* x+ X3 |: X
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
. p4 m( L, P+ V0 u3 j6 Ethen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $15 K( B. b8 Y# T; V3 k. y: j- a
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have' M9 z& M' r& d" ]& }8 l6 E
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
+ u! N* {1 k- I+ |+ z5 b# ~CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are+ t6 j2 \6 i. ]2 T9 i: C
positive for the year-do-date, including high yield.0 e$ z/ ~. `" c1 z j6 [
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
5 N2 Y/ q6 @( J. `( L1 t8 cfinding financing.( i+ F' ^) y) `; H. \
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they$ a9 d* G R+ s. r1 [& R) m
were subsequently repriced and placed. In the fall, there will be more deals." k7 I+ X; a- n; g: d& F
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and( g3 L7 O! O. F$ x/ y" J. r& F( H/ l
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
5 L" ~& t; c ?; e9 Ggoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
9 t+ ]% [3 `' }3 B6 i6 T1 b" l) Pbankruptcy, they already have debt financing in place.
0 c3 J7 _/ T" } {& ? European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
. C }* K% F* x; y- k3 ntoday.+ c9 j( m: ^" H6 }! l6 S
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' }, V- C1 W4 |- `% Pemerging markets have no problem with funding. |
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