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发表于 2011-9-17 13:16
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Current situation
9 A+ q/ M- W- u, O' P6 Z The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long
" z# Z k0 v/ [( [) q' G1 j- M8 Mas funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may1 j+ ~8 \0 E p, k# {! l) R9 X; d
impose liquidation values.
8 }/ H' c' q& q5 i" P; h In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In4 V. a% ^2 w0 t3 \1 M7 Z
August, we said a credit shutdown was unlikely – we continue to hold that view.
7 t( L N# ^, A0 E' e The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension# C1 j! Z, U0 W/ ~3 U" l6 y
scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.% W, d/ L$ J4 u& F3 M
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A look at credit markets
& H3 f" q! c' \ }$ R Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in7 R9 k/ w2 r) d' C
September. Non-financial investment grade is the new safe haven.! V7 \* t4 D& P5 c5 S) G
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%' V9 G9 w2 w; U
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
6 A9 h% o( c& K* Z5 @* Y0 Z) Ibillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have2 u% ]1 a$ M! q, L3 ]3 C
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade* T$ C" B- k' F' ], q
CCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are X, D( L1 H" `: [9 c+ I3 @
positive for the year-do-date, including high yield.' j) O: x9 P& }3 [3 b5 \
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble, V4 J6 ?2 v) N; G( |& H& ?! G8 H
finding financing. _1 ^9 H& S# m6 w, {- x v/ D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
+ D/ R& F* ^! I% K3 u& Pwere subsequently repriced and placed. In the fall, there will be more deals.
! x6 X/ W5 Y* z' ^5 Q* X: f, C Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
- t" C5 y# |& L K$ Ris now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were
* d f% [6 |% x' F1 r" ?/ s2 j# T% ]going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
6 _) o! x4 y( x2 A! ^% l# ^bankruptcy, they already have debt financing in place.
! n* Z. r* P) P8 [5 | { European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
0 ?2 \+ Y$ m Z" Atoday.% v5 b1 L9 b2 k9 f% `
 Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in* K) g. g% y$ [2 z5 g' Y
emerging markets have no problem with funding. |
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