 鲜花( 3)  鸡蛋( 0)
|

楼主 |
发表于 2011-9-17 13:16
|
显示全部楼层
Current situation
( G3 O- D6 p5 R The lesson we learned from the 2008-2009 credit crunch is how credit markets affect stock valuations. As long6 v8 _ i; @ ^9 K
as funding markets stay open, equities are valued as going concerns. But if credit markets close, markets may$ M8 b; Z; v u) x" s6 g
impose liquidation values.
5 n/ B8 r" B/ t4 x m X In the summer, the European credit crisis caused another round of market worries about a credit shutdown. In
% I* y7 C, \; Z2 k( VAugust, we said a credit shutdown was unlikely – we continue to hold that view.' v' I( u x& ?
 The collapse of interest rates on 10-year Treasuries to 2% leaves banks, insurance companies and pension
# ]; j' K# K# m% Y2 t( _scrambling for higher yields to satisfy their obligations – this is supportive of corporate bond markets.
9 Q/ u' M9 k2 Q+ h d$ b9 K1 t9 `. U; l* O% o# _2 s2 w
A look at credit markets
7 N( W! L% X t9 y/ ?& R0 l( s Investment grade – $17 billion in new issues were placed last Wednesday. We’re expecting $80-$100 billion in5 d% \" |; {' ?) \: }
September. Non-financial investment grade is the new safe haven.9 O" I& X* u9 V/ P2 N- X
 High yield – In March, the spread above governments was 450 basis points, today it’s 740 bps. Yields were 7%6 ?% g9 t+ R8 m* R7 I! M# s5 s' n' T
then, now they are 8.5%. New issuance has been about $30 billion a month, although August saw only $1
! J4 J: \ g0 P+ B! G3 jbillion. That said, the market is still open. Risk has been repriced – but appropriately priced issues still have
( ]8 @' p" D* Kaccess to the market. There are only two parts of the global bond market having difficulty – ultra-low-grade
6 g. Z4 \ n6 cCCC issues and European high yield, which are both down about 2.5% year-to-date. All other bond markets are
: O% c# G! c9 apositive for the year-do-date, including high yield.
+ j( @) x& L/ P3 e& K5 F* f9 Z Mortgages – There is no funding for new construction, but existing quality properties are having no trouble
( M! n) `0 j6 E; y& Ofinding financing.0 ^ F5 c" ]" H
 Commercial mortgage-backed securities (CMBS) – In the summer, there were two failed transactions, but they
- k2 p& w1 H* Z- L8 ?2 j- wwere subsequently repriced and placed. In the fall, there will be more deals., [, T2 s: |' Q! o: M
 Leveraged floating rate collateralized loans – The index was trading at $90 last September, $96 in March and. G6 R6 S O. F" ]* k. ~0 T
is now back to $90. Changes were a result of interest rate expectations (people thought that interest rates were( q! m; u8 j0 k
going up) rather than liquidity. Chapter 11 companies have no problem getting secured and when they file for
# n) Z" U3 |, B& N1 ybankruptcy, they already have debt financing in place.( U+ M3 E1 x7 D+ X! |: e3 H
 European banks – European bank lending conditions are tighter. This is the weakest link in the financial chain( o5 X+ j0 D1 I1 a* W: @* v9 O: a/ n
today.
4 d6 k" i) P' K' g0 j1 Z Emerging markets – Sovereign rates have rallied along with U.S. Treasuries. High-grade corporates in
' U- F- v! m0 R9 ^emerging markets have no problem with funding. |
|