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发表于 2011-9-17 13:16
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Current situation
1 l. T+ |! X1 H! {; Y7 J& @- E The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 d) b. U& R: w* Q0 V: X. [- F
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may; E; e" q. a" `8 H- N' }
impose liquidation values.
3 H- A, ~, \6 t$ q; y, n/ P In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In) L7 z N0 Q8 P0 |8 F
August, we said a credit shutdown was unlikely – we continue to hold that view.+ K/ K1 W5 P7 d( k% o* g
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension1 o" J4 d$ b8 ~
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.8 s: r% @2 B, k2 w1 l4 ]% {/ |
/ l$ c/ y) B; x7 G4 pA look at credit markets
n- L% T/ m# H9 k Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in4 Y. S5 m/ Q( V
September. Non-financial investment grade is the new safe haven.9 S- f. h* j. I$ [1 s' ~$ K
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
8 \$ w0 p0 D) r6 Uthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
5 W" s' O- N7 P r( vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
! v. U& f- h }0 U5 ?" [9 ^access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
0 j/ @3 n3 }* L7 V ]# H! n2 vCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are8 ]: W4 R& Z2 f6 D
positive for the year-do-date, including high yield.
( X' l2 \1 E1 t4 C6 O8 q, E }( B; j Mortgages – There is no funding for new construction, but existing quality properties are having no trouble% O; l3 w$ i" c, U9 O) E
finding financing./ G; E. ^4 }; B& D& s7 c3 f1 j
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they- s6 m* e9 z$ \+ O% I# {% T7 ?
were subsequently repriced and placed. In the fall, there will be more deals.
( r8 }" u0 q/ e B Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and6 x& z3 D) u/ A5 J
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
. m! l; t D3 u, qgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
5 h$ b+ j- T) s3 v- ebankruptcy, they already have debt financing in place.
% B- h1 }; f& `% p European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
8 ~, ?' E: | E0 ^& Dtoday.' i- w; ^. X r4 G5 e/ ]6 K; B
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
# t6 d; I: x3 v) Nemerging markets have no problem with funding. |
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