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发表于 2011-9-17 13:16
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Current situation4 [. J7 z) m1 V9 o0 p
 The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long2 D3 F+ n# @. t: a( I
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may: n- |% g) C- N* {( q2 w5 m+ I6 ?
impose liquidation values.
/ }3 q. v- [, W( w5 k In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In( I' Z% ]- W4 W# I, V. y9 ~
August, we said a credit shutdown was unlikely – we continue to hold that view.
/ H: @* x2 V7 r' c The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! C7 p7 }& H+ H- J x3 T8 `scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.- s- x$ ] A, j* g$ b$ P
/ S, B/ P' ^" F- vA look at credit markets. H( }. x7 V2 b$ e$ ~
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 }# L- a1 T4 f$ I# T
September. Non-financial investment grade is the new safe haven.
6 w5 Z' ~0 d! H" T' s' q! @8 l High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%5 Z+ Z$ z+ [1 Z1 I) |) O
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
* \% m. q y6 W( I: G ^- vbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have* w" v( a. v# S+ |. F8 H0 Z$ I' H# z# [
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade$ o1 W, Y5 D% u8 G7 D; O. Z
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are4 j& s4 S; L! |, m3 n7 N
positive for the year-do-date, including high yield.
; Z5 M. U& a: j, Z: R' B Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
# H O+ a& d$ _5 {9 a: R% T5 ?# Xfinding financing.) w% O! w. V2 t$ y" x
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
4 ~3 E) ^+ r% z) e0 mwere subsequently repriced and placed. In the fall, there will be more deals.* g( W5 E/ f! S6 f
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
, F1 g: H$ ?& _9 z; H5 s# z( bis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
3 Z2 e/ I0 {) k9 ~% Fgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for+ K+ v9 G$ a8 ]3 m7 U1 g
bankruptcy, they already have debt financing in place.( v) B( Q0 b8 F) F0 H/ c* R
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
: @' V! S- Z- G# n, g3 Vtoday.
2 H1 c( F& Z+ u3 o& z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
$ M) _3 x" C: P6 b& Hemerging markets have no problem with funding. |
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