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发表于 2011-9-17 13:16
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Current situation
. v ^* A0 p. O) F X% R5 {9 d6 U The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
0 g( x" F# H0 d* _2 vas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
+ h Q# q. r- p7 E% bimpose liquidation values.& ?* T& W/ O, ^
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In/ ^' f. a" [# \! Z( w4 p0 P8 }
August, we said a credit shutdown was unlikely – we continue to hold that view.) Y% F8 N A+ [4 @4 E* Y6 e1 o9 D
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
8 T) Z, r! \& hscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.. @/ ~8 _0 O( r9 \) ^% D. ^
0 W7 H; D# D! ~% P) z
A look at credit markets, }6 W1 p! X N3 z
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in" X8 C) o' h/ W- o! J% ~) V* v
September. Non-financial investment grade is the new safe haven.
i9 |; w! e* F E+ V2 } High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 L( j* d: E8 |8 T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1" `2 ~2 {% N7 K; ]- |
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
# l9 n7 x/ g& O K" Y2 J7 {access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade5 E% N/ Q% f3 {# _# d- S
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
& a) @+ e# M. k6 U* C; i0 gpositive for the year-do-date, including high yield.
/ ^! \& G+ l1 k8 f1 Z, S& ? Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
& @) Z5 ?5 M# c9 L6 A, Ofinding financing.
* u, _* s, V% {2 E* n Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
! _3 g; Q+ ^8 X- J- uwere subsequently repriced and placed. In the fall, there will be more deals." @0 C) [" m/ @2 l: h) s
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and# w* u( c9 Y% S
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
4 m3 r+ h0 y* s% v! j! A. _# S6 Sgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
- `3 s8 Q7 N4 vbankruptcy, they already have debt financing in place.
0 O0 M- a' t/ e; ?3 p* k/ W European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
5 h X% k" X/ ?' ~9 rtoday." H5 g( U* h( q& p+ B8 C! |, T% E6 q
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in3 w# r6 x' W- z( }
emerging markets have no problem with funding. |
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