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发表于 2011-9-17 13:16
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Current situation
, }* o0 C- o" Q The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long1 w+ k, p5 P4 l+ h8 o( A; |; _3 r0 J
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may% F' T5 w0 L2 g+ a/ F9 q
impose liquidation values.8 ~9 O) h9 |" W9 ` B8 T( b y
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In, ~0 C2 u' Z4 l5 ]4 j) X" U
August, we said a credit shutdown was unlikely – we continue to hold that view.
6 S: k) b- p8 B K% t+ k: b! Q4 z; N" F The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
5 M' }4 @' U5 L3 j6 zscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
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9 d d" r" N; {2 g; S3 N0 HA look at credit markets
# e5 C3 S/ @5 B. i. C) q Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
' F' a# N8 `( t% ^9 eSeptember. Non-financial investment grade is the new safe haven.$ k3 N) s2 H" \3 V e2 K! O
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%
2 L0 A/ i! V! L+ rthen, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1* m: I) _6 N( a: J3 o6 B
billion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have. ^! w. T8 r+ D7 q
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 C- E7 x6 l$ j HCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are3 {4 N) S; e' G* u+ t7 W
positive for the year-do-date, including high yield.
( Q. R' ]8 M2 x# j9 z: o Mortgages – There is no funding for new construction, but existing quality properties are having no trouble( q* i: C" j& W k4 t
finding financing.9 u, V8 D% r8 _' h) I
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they ?5 L$ U( {/ R9 K
were subsequently repriced and placed. In the fall, there will be more deals. M& C- l1 l( B3 n% x$ K
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and! ], E& g. y- p. x! D' R. \0 U* c+ o
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
( z& e4 ~) L2 Cgoing up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for" X. E4 N1 s7 a/ e+ @
bankruptcy, they already have debt financing in place.
) e( u/ F# K& R& G3 ?4 S1 R" [ European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
* R8 V |0 _4 Y4 ~1 K, utoday.
/ ]0 U( F! `9 Y- S" ^: m Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
, P c3 \' y+ c( Y/ kemerging markets have no problem with funding. |
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