 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
1 }0 K6 N# d: N7 G# X The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long8 Z) S8 B) i1 ?( n* t; r
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may
! i% l3 l! E/ T5 i" {impose liquidation values.% E7 A+ w: j* Y. F" `
 In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
' V2 N# L9 z1 y" v' nAugust, we said a credit shutdown was unlikely – we continue to hold that view.+ u; w8 l9 l, I" d
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
! d5 s+ }/ P# K8 J1 V. sscrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
# c( t! M4 x# [1 @( {2 |9 m6 @
A look at credit markets, u4 c) j v# s; r7 `& L
 Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in
2 |2 ^% |4 E. v- o* lSeptember. Non-financial investment grade is the new safe haven." W& W9 \3 E5 N t- e8 D2 `
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%% H+ [9 ^5 {% e& m( O! v
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
, O6 K( W/ V. J* Ybillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have- Z$ ^+ F6 k/ e: G4 U2 k
access to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
- Z7 r& X; {; x6 r9 X8 |( i& gCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
4 u, p+ U8 e' c& m# \- \6 Z: s5 kpositive for the year-do-date, including high yield.5 P% O5 |; Y. ~6 Y; L6 w4 y
 Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
" s: {/ m& [4 A0 ~1 kfinding financing.4 T* h/ W9 D8 D
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they# G# Q& [* v9 f, j
were subsequently repriced and placed. In the fall, there will be more deals.
0 S% w& t* e% s8 g Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and
9 U; w. p$ W+ Z) m4 @4 v1 |$ z* lis now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were: ]( Z0 n) Y! {; D. X4 |2 j
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for$ ^5 m' ~' [! `9 y8 {1 C
bankruptcy, they already have debt financing in place.
1 B% X) X! X3 c2 u) C7 q/ I European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain
" ^" T+ C8 g u8 ~4 _today.
2 Y3 h+ Z' i' P! R9 W' V Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in& K+ ~* V6 h# l% q h
emerging markets have no problem with funding. |
|