 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
( `7 g& z% O, X0 y A The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long- b9 `" S% t3 P4 N- @# A
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
: P9 k3 K' s# w! I# ` wimpose liquidation values.6 B# {# z+ b' D# \1 o
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
. B7 E: ]. x' jAugust, we said a credit shutdown was unlikely – we continue to hold that view.6 _# Y1 n/ {: ?, i9 t
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension+ l! `0 ?1 b2 p
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets. j. M/ o/ z- z) @8 L8 z
. ?$ z4 R. x' i: LA look at credit markets
0 K4 f$ Q8 q8 D+ z Y5 f* q$ ] Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
* B/ D# C# m1 g' E2 A7 o3 USeptember. Non-financial investment grade is the new safe haven.: k/ b @: Q$ z @, N: v7 H5 D; y
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 d( R9 i. R P9 T$ ]
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
) x. x+ i5 `( h7 f' N" R" Sbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
" w0 N, K" N5 v( q4 g. U( j+ waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade% v) w1 s7 L- t- g a% |
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
+ y: {# G' k' n* G- ?positive for the year-do-date, including high yield.5 u& N! z% I. Y! l
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
+ @- T( K3 ?1 V' a3 d3 Mfinding financing.4 h3 ^! A# g$ b- @* c0 }$ g
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they. {2 x9 b. J4 S+ r
were subsequently repriced and placed. In the fall, there will be more deals.
8 K8 X" `. H( F( ]+ e0 w Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and9 O- P! t6 J; O0 _
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were7 Y# Z) g( j0 b# e& L$ q5 o4 g
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
" h3 n, o0 _6 `$ C. ebankruptcy, they already have debt financing in place.
7 {1 L$ ?2 K7 b& d; i$ \0 h European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
$ b: X( M6 e- wtoday.0 k+ }0 U. X' U1 \0 m0 x- k
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
1 ^& }8 [! r: A- Bemerging markets have no problem with funding. |
|