 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
% X" x. O1 {. S7 ]& x5 b& P The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
) E+ p2 C3 n2 i# \3 bas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
8 Y! a5 ^3 {( zimpose liquidation values.
9 K3 M) f5 }7 M. R9 E& O In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In6 ~: D! V2 ~8 x& k+ o5 ]3 H) ?
August, we said a credit shutdown was unlikely – we continue to hold that view. P( U* ]9 ^1 p) I& U1 P
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
+ j# t9 w. C& z3 U5 ]+ _scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.3 Y; Y" t% e0 p ?- W
1 K; [* y" u+ g1 w) ^% A, o/ Y
A look at credit markets
7 S9 t% h0 a, B9 |/ w. d8 t. i/ I Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 F/ E& i1 K$ E, s8 Q2 g1 y
September. Non-financial investment grade is the new safe haven.
- }) l* _' _) ?3 h" L2 \# f High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%4 G/ D6 A( A2 x% i+ z# |
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 L, d! E4 o+ P$ ?# ^billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
/ Q0 _" z' u7 z7 Z" V9 Waccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
" [7 Q! Y/ C* C$ v& BCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are/ W! ^, @+ ]8 f/ F5 Q9 X
positive for the year-do-date, including high yield.$ h, _3 n% V2 x
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
$ K/ I9 D+ q) S0 lfinding financing.
% M; `3 v" z C- X- H6 j9 u9 T& F Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they5 x. q# O/ w7 M# ~/ E
were subsequently repriced and placed. In the fall, there will be more deals.) d0 b9 Y" i k# l' S! B$ I
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and' y, F+ ~4 m- {, ~( ^# p
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were3 o3 V6 Y9 ]2 @
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for) q; p' S4 i6 M
bankruptcy, they already have debt financing in place.
9 M& J7 O9 L* A$ s, D0 l# U+ r European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain" V1 U( T: `' N& A; M6 ^; D/ f
today.8 |$ ]2 O: E, w$ u* V7 k# L5 x# x" u
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in6 `! K4 H" C% K2 B P+ S
emerging markets have no problem with funding. |
|